The growth of the buy-to-let market has pushed property prices out of reach of first-time buyers, Birmingham academics have warned.
House prices in parts of the West Midlands are 13 times average salaries and the market had been distorted by investors who saw property as more profitable than the stock market said.
Professor Alan Murie and Peter Lee, from Birmingham University's Centre for Urban and Regional Studies, were giving evidence to a Commons select committee, including Warwickshire MP Bill Olner (Lab Nuneaton), holding an inquiry into the state of the housing market.
The Government has promised to make it easier for firsttime buyers to get onto the housing ladder.
Prof Murie told MPs "The buy-to-let market is beginning to crowd out people from the home ownership sector.
"The question we are raising is how far the expansion of the buy-to-let market is compatible with the expansion of the home ownership in the way the Government wants.
"In the centre of some cities at the moment, a very high proportion - I have heard a figure of 95 per cent - of properties being sold are to the investment market."
He added: "It is partly that the development of the buytolet market means you have a different type of ownership emerging, people who own their own home but are increasingly owning a second and maybe a third home as well."
Mr Lee said: "If we look at new build, specifically in the West Midlands, and we are looking at the rural parts of the West Midlands, where the ratio between incomes and house prices is roughly 13 times local household incomes in Malvern Hills, that means that the relationship between local incomes and the housing market has been completely distorted."
According to figures published recently, the average salary in the West Midlands is £ 22,529, just above the national average.
Mr Lee added: "The ability of people to get on that first rung of the ladder and that relationship between local incomes and the housing market has been distorted by external investment."
Making property cheaper would not help first-timebuyers because it would make housing an even more attractive investment for potential landlords, he said.
"Housing is being viewed as something not just about accommodation and the roof over one's head but as a kind of a supplement to the welfare state and as a supplement to the ability to consume more, which obviously is going to be different for different groups, depending on your starting position in the housing market.
"The competing investments are the stock market or whatever, and they are not getting that kind of return.
"We know that they are getting a yield on buy-to-let of roughly 22 per cent when we look at the capital appreciation, and we look at the kind of rental income coming from that."
The news came as figures showed people renting private accommodation pay twice as much in rent each week as those in social housing, but their salaries are more than twice as high
Private renters in England pay an average of £117 a week for their home, compared with £59 for people who live in social accommodation, according to the Office of the Deputy Prime Minister.