The impact of housing costs on economic activity in the world's economic hot-spots has been thrown into the spotlight after new research found that a shortage of affordable, good quality housing is having an impact on three quarters of London businesses.
According to the London Business Survey by employers' group, the CBI, and consultants KPMG, half (48 per cent) of London employers say that housing costs are putting upward pressure on wages, whilst more than a third (36 per cent) said it is impacting on employee morale.
One in three are having to alter their working hours and methods of working as a result, and ten per cent said productivity is suffering.
The survey also found that more than half (53%) of London businesses fear skills shortages during the next six months, with these concerns most significant amongst professional services companies and in the construction sector.
These skills shortages are only exacerbated by a shortage of appropriate housing in London & the South East restricting the labour pool available to companies.
And the CBI warned that London's skills needs are expected to come even more sharply into focus as investment for the 2012 Olympic and Paralympic Games begins.
"This survey shows clearly that the housing shortfall in London and the South East is impacting not only on key public services, but on the private sector too," said Sir Digby Jones, CBI Director-General.
"London's economic success is crucial to the UK as a whole. But inadequate housing supply is pushing up costs and making it more difficult for firms to recruit and retain the staff they need to sustain and grow their businesses. So it is vital that the Government delivers on its pledges to improve the housing supply."
Mark Titterington from the Campaign for More & Better Homes, a coalition which includes Shelter, Unison, and the CBI, said that the survey added to the overwhelming evidence around the social and economic consequences of the housing crisis, but warned that without more and better homes, "we will be talking about the same housing related problems for decades to come."
