The lack of mortgages available on the market is widening the wealth gap between the rich and the poor, creating a more "polarised" society, a new study warned today.
The National Housing and Planning Advice Unit (NHPAU), the body set up to provide independent advice to local and national government on housing supply and affordability, said a continuing affordability problem has accentuated inequalities with evidence suggesting "it can make the children of affluent owners still richer and the poorest even more disadvantaged".
The wealthiest 10% of the population has seen home values rise at more than three times the rate for the poorest 10% and the NHPAU said the impact will continue for future generations as vastly differing levels of wealth are inherited by the next generation.
"We are in danger of creating a more polarised society if we fail to tackle our country's housing affordability problem," said Neil McDonald, chief executive at the NHPAU.
"We must not be fooled into thinking that the current fall in house prices means the problem is solved. Mortgage rationing means that housing is not more affordable in any real sense. And in the medium to long term an undersupply of housing means that affordability will simply worsen once the economy starts to revive."
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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