The report also highlights problems with single-living accommodation.
There are "issues such as a lack of hot water for months in winter, heating failure, flooding, damp, rat infestations and inadequate facilities for washing and cooking", the report said.
"Ageing accommodation blocks often cannot meet modern living requirements and standards", it added, and "this is having an adverse effect on recruitment and retention".
The report said 40% of those living in single-living accommodation said their experience living there had "increased their intention to leave the armed forces" - up from 34% in 2022.
In written evidence to the committee, one person said there were "broken ceiling panels, outdated bathrooms and washing facilities, furniture and fittings that are over 40 years old".
It "does not represent a modern fighting force", they said.
But the committee said it was "not confident" there would be enough money available to fix the issues it highlights.
"The MoD has acknowledged that current levels of funding are insufficient to bring all service accommodation up to decent, modern standards, and that 'it is investment that ultimately will lead to the change'."
However "in the current economic climate, and with so many competing pressures on public funds, we are not confident that the sustained investment required will be forthcoming in future Defence budgets."