Businesses in the capital are finding it ever harder to recruit people because London housing has become unaffordable for workers on lower wages.

Referring to its own research into business attitudes, the CBI described the housing market as “one of the biggest threats to competitiveness” in London.

Some 83 per cent of 154 respondents pointed to a lack of good quality affordable housing in the city. Just under half added that pay rates had been forced up as a result.

More than six in 10 said housing costs impacted on recruitment for entry-level jobs and half said the same of mid-level managerial positions.

Nearly a quarter thought it was a problem for senior staff recruitment too.

About the same number reported staff members having to quit and move, having been driven away by the cost of housing.

“The lack of affordable quality housing is becoming a real headache for London’s businesses and their employees,” said Sara Parker, CBI director for London.

“Many firms are telling us that recruiting and retaining staff is getting tough because people are being priced out of local markets and are forced to move further and further away from their workplace.

“This adds to the cost of their commute and ultimately to business staffing costs.”