Superstar wealth inequalities and the role of housing: A regional perspective from Britain

Source abstract

This article examines the evolution of wealth inequalities across regions in Britain, and in particular the role of house price inflation, homeownership and mortgage debt in driving these wealth inequalities. Drawing on descriptive and regression analysis of eight waves of the UK Wealth and Assets Survey from 2006 to 2022, our findings indicate that (net) wealth inequalities rose more rapidly (and from higher levels) in London than in the rest of Britain. We argue that that this discrepancy can be significantly attributed to housing: not only did London experience higher rates of house price inflation but these gains were shared amongst a smaller subset of property owners and were levered with relatively high levels of mortgage debt. Moreover, London also has a disproportionately large number of asset-poor, low-income renters, which further exacerbates wealth inequalities. We also find that increases in homeownership rates at the regional scale are consistently associated with a compression of (net) wealth inequalities. Our findings highlight the need for more research that considers the distinctive features of different regions, and particularly ‘superstar cities’, in conditioning the relationships between house price inflation and wealth inequalities.