Housing market widens 'wealth gap'

5 May 2009 06:02pm

The housing market is widening the wealth gap between the rich and the poor, creating a more "polarised" society, a new study has warned.

The report on housing affordability suggested that the wealthiest 10% of the population had seen home values rise at more than three times the rate experienced by the poorest 10%.

The National Housing and Planning Advice Unit (NHPAU), who commissioned the report, said the market could make children of affluent owners still richer and the poorest even more disadvantaged.

A NHPAU spokesman said: "The impact will continue for future generations as vastly differing levels of wealth are inherited by the next generation."

They added that first-time buyers were becoming more reliant on parents for large deposits and therefore better-off families had an advantage.

The NHPAU said this financial assistance may result in the housing market becoming more polarised, with the children of wealthy homeowners representing a greater proportion of all new purchasers.

Chief executive Neil McDonald said: "We are in danger of creating a more polarised society if we fail to tackle our country's housing affordability problem.

"We must not be fooled into thinking that the current fall in house prices means the problem is solved."

In addition to the widening wealth gap, the NHPAU said there were other social and economic consequences of the country's continuing lack of housing affordability including poorer health, unemployment and a housing market prone to "boom and bust".

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