Prices of homes in the South-east are on average five times higher than mean annual incomes, according to the National Housing Federation.
It said employers were being forced to raise wages to get workers to take jobs. It said a hotel in Weybridge, Surrey, had to house two-thirds of its 130 staff in hotel bedrooms or in homes it had bought.
Liz Potter, NHF policy director, said 1.4 million homes must be built over the next 17 years to prevent the economy from suffering. "If we do not build these homes, employers will struggle to find employees," she said. "People already living in the region will also struggle to afford homes. We need 11,000 new affordable homes every year to keep pace with demand."
The report calls on the Government to increase employment opportunities in other areas of the country and stem migration from north to south.
A separate report said the gap between prices in London and the worst- performing region, Yorkshire and Humberside, had reached a record pounds 76,500. Roof magazine said the gulf was one of six factors that showed the market was unstable. The others were soaring prices, risky lending, booming confidence, arrears, repossession and record lending volumes.Reuse content