New action to create more affordable housing for nurses and teachers will soon be announced, Deputy Prime Minister John Prescott has signalled.

The continued rise in house prices is hampering efforts to recruit public service staff in some areas, especially London and south-east England.

I'd like to see a step up and hopefully I'd be able to promise you that

John Prescott Deputy Prime Minister

The latest survey from the Halifax bank on Thursday suggested house prices were rising by nearly a fifth a year.

Chancellor Gordon Brown is expected to try to tackle the problem when he sets out the government's new three-year spending plans this month.

Speaking on BBC One's Question Time programme, Mr Prescott said housing was an "extremely serious problem" for nurses and teachers nationwide.

"The massive rise in house prices has caused us very real difficulties," he said.

Damaging public services?

Mr Prescott continued: "We have put extra money available to meet some of those requirements.

"But the scale is far greater quite frankly, and we are looking very seriously now at how you can actually do more than what we're doing at the moment.

"Because the whole quality of life affected by the public services are being affected by that, and if you want to provide houses you can't just provide it by simply giving the subsidies between the market price and what people can afford, we've got to do something much more effective than that."

The deputy prime minister said he would "like to see a step up" in the number of affordable homes being built.

"And hopefully I'd be able to promise you that," he added.

He could not say more, he added, because he did not want to break parliamentary rules by not first making a statement in the Commons.