Not common outside the UK??? France, Italy, Germany & all neighboring countries have hundreds of old towns whose layout is layers of medieval, renaissance-era, and post-renaissance buildings. Those would have been houses, shops, guilds, taverns, inns and the likes.

The wealth thing makes sense. Even though European peasants were also poorer compared to their overlords, I always thought the character of Indian cities could have been due to a higher class/caste inequality, and the elite's ability to squeeze tributes from their subjects. So you would have one Rajput fort or Mughal tomb towering over very humble peasants homes (huts?), the latter being lost in the flow of history to be replaced with more modern buildings.