Theresa May and Croydon Central MP Gavin Barwell during a factory visit in August. Photograph: WPA Pool/Getty Images

Downing Street has rejected the housing minister’s suggestion that parents should leave their property and savings to their grandchildren rather than their children to help them get on the housing ladder.

Gavin Barwell made the call for pensioners to skip a generation when writing their wills as he revealed that his 75-year-old mother had chosen to leave her £700,000 house in Croydon to her five grandchildren rather than himself and his brother.

But Theresa May’s deputy spokesman said the senior Conservative had been speaking in a personal capacity when he made the remarks at a fringe event at the party conference last week.

The aide said it was not acceptable for the government to intervene in the way people decide to distribute their wealth after their death.

“These were personal comments made by Gavin Barwell at a fringe meeting at conference and they are certainly not policy. What is important in terms of government policy is that we build enough homes,” he said. “What people do with their estates is an issue for them. It is not for the government to dictate how they complete their wills.”

No 10’s position represents a rebuke to Barwell, who was given the role of housing minister by May during her July reshuffle.

The MP for Croydon Central, who owns a £750,000 house three miles from his mother’s, had said the decision could help to reduce intergenerational financial inequities. “Generally in life we all like to think that our children are going to be better off than us. In terms of new technology and life expectancy, they are going to be,” he told a fringe meeting at the Conservative party conference in Birmingham last week.

“But at the moment, as things stand, they are less likely to own their own home and we need to do something about that.”

However, Barwell added that he did not want to live in a country where it was necessary to have a wealthy grandparent simply to get on to the housing ladder, the Telegraph reported.

In her speech to the party conference on Wednesday, the prime minister described the UK’s housing market as “dysfunctional” and said the “power of government” was needed to repair it.

The average house price in England stands at £232,885, according to Land Registry figures, with the average in London more than double that figure at £484,716. Part of the problem is the UK’s failure to build enough houses to meet demand.

There were 143,560 housing starts in England in the 12 months to December 2015 – 6% higher than the previous year but still far short of the 240,000 dwellings that need to be built annually.

With many would-be homeowners forced into the rental market, the Royal Institution of Chartered Surveyors warned last week that the UK faces a shortfall of 1.8m rental properties unless the government took swift action.

The housing industry body called on ministers to reverse stamp duty changes on second homes and consider incentives for build-to-rent schemes, after it found a drop in property investors’ appetites to add to their buy-to-let portfolios.

Analysis by accountancy firm PwC suggested that by 2025, 7.2m households would be in rented accommodation, compared with 5.4m in 2015 and 2.3m in 2001. It predicted that a quarter of those tenants would be living in private rented accommodation.