High house prices 'stalling growth'

Estate agentSoaring rents and high house prices are stifling business growth and making it hard for firms to recruit staff, a survey of employers has warned.

Nearly four in five employers questioned across England believe that a lack of affordable housing is stalling economic growth in local communities, the National Housing Federation found.

Some 79% of more than 1,000 managers surveyed said that building more homes would stimulate the local economy and 72% thought it would encourage more customers into their area.

Around 78% of managers also agreed that house prices are a "problem" in their local area and 58% said building more homes would help staff recruitment and retention.
National Housing Federation director Gill Payne said: "Our economic recovery is being held back because there aren't enough homes in England today, and this lack of homes has pushed up prices and rents beyond people's reach.

"As a result, businesses are finding it tough to attract workers and expand because many people can't buy a home or would struggle to pay high rents. If things don't change, employers will simply move - potentially out of the country - taking away desperately needed jobs."

Lucy Thornycroft, head of housing policy at the CBI, said the country is "falling woefully short" of building the homes needed. She said: "We now need to see real urgency to boost housing supply and affordable housing to stabilise the market in the longer term."

Housing minister Mark Prisk said: "The unsustainable housing boom led to a near trebling of house prices in the decade from 1997 and a decline in the numbers of homeowners since 2003. In stark contrast, housing is now the most affordable for first-time buyers for a decade, mortgage rates are at their lowest for 14 years, and homebuying costs have fallen by a third over the past four years.

"But we're also working to get Britain building, by transforming the planning system to support growth, while securing £19.5 billion public and private investment in an affordable homes programme set to deliver 170,000 new homes and a £1 billion Build to Rent fund to deliver newly built homes specifically for private rent.

"And to help anyone looking to take their next step on the property ladder, we've introduced the Help to Buy and NewBuy schemes which enable aspiring homeowners to buy newly-built homes with a fraction of the deposit they would normally require."