A lack of suitable premises is making the skills shortage worse for London businesses, research reveals.
A new study by the Confederation of British Industry (CBI) and KPMG shows that the problems associated with finding affordable, quality property in London and the South East is impacting on three quarters of the capital's firms.
As a result, many companies are facing a restricted labour pool and employers in the region are suffering from skills deficiencies more acutely than others, the report claims.
Over half of employers said they are afraid of a shortfall in skills increasing within the next six months.
"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," said Sir Digby Jones, director-general of the CBI.
Jones said the current planning system has consistently failed firms and welcomed the government's decision to launch a review. Ministers have also announced they will deliver an additional 50,000 new homes per year over the next decade to help rectify the problem
Others also pointed to the Olympics as a potential boon for the region.
"The arrival of the Olympic Games to the South East in seven years will definitely act as a catalyst in the development of new affordable housing and will provide a lasting benefit for people and businesses across London," said Ian Barlow, London senior partner at KPMG.
