The current planning system is increasing the North-South divide, according to a think tank.

Centre for Cities says the 'nimbys who dominate local politics' must be challenged and the planning system reformed to stop the 'gifting of wealth' to homeowners in successful cities.

It says homeowners in the South East have become £80,000 richer over the past six years than those elsewhere in England and Wales because the planning system’s 'rationing of new homes' in areas of high demand drives up house prices.

The think tank says the Government should ensure that housing supply meets demand in popular areas by introducing a flexible zoning system of the kind used in Japan and some parts of the USA.

Centre for Cities chief executive, Andrew Carter, said: 'Our planning system is fuelling a North-South wealth divide among homeowners.

Restrictive planning policies in many prosperous southern cities are gifting wealth to homeowners in the Greater South East.

'This creates two wealth divides: one between homeowners in the Greater South East and elsewhere in the country, and another between homeowners, who tend to be older, and renters, who tend to be younger, within the Greater South East.

'The best way to address this inequality is to build more homes in the areas that have seen the biggest increases in housing wealth.

'This means radical reform of our broken planning system and challenging the nimbys whose voices dominate local politics.'