Council officers fear people could be priced out of the house market

The house price rise could come in the wake of a UK Government move to cut the number of houses built in English counties adjoining Powys.

New houses in nearby Herefordshire and Shropshire is expected to be cut back by up to a third under the plan.

Powys Council officers say increased pressure for housing development there would follow - forcing up home prices.

Our concern is that the house building tap can't be turned off and that reducing the number of houses built over the border will have an impact on Powys Nick Smith, Powys Council

However, the chairman of Mid Wales Manufacturing Group says the demand would provide the county with a much-needed economic boost.

A report before Powys councillors on Thursday claims restricting housing development in the English counties would encourage a 'leapfrog' of housing developments from the West Midlands to Powys.

Strain

"This could lead to increased pressure for housing developments in Powys, add to increasing house prices thereby exacerbating problems of affordability for locals," the report claims.

It also suggests local services will be stretched and new developments could put a strain on existing communities.

The strategy could also affect Powys' own Unitary Development Plan (UDP) which should be completed by 2006.

The Powys plan proposes the building of almost 6,000 new homes in the county up too 2016.

Eamonn Forde says more houses would boost the Powys economy

"Our concern is that the house building tap can't be turned off and that reducing the number of houses built over the border will have an impact on Powys," said Nick Smith, the council's planning policy and conservation manager.

The West Midlands planning strategy aims to slow-down house building in Shropshire and Herefordshire and concentrate housing developments in urban areas.

The effect would be a reduction in the number of houses built in Herefordshire from 800 to 600 every year from 2007.

In Shropshire, the number of new homes would fall by 400 from 1300.

"There is a possibility that there would be more cross-border commuting but it would be up to us to set up an appropriate strategy to alleviate that growth," said Mr Smith.

Eamonn Forde, chairman of Mid Wales Manufacturing Group, said the move could help businesses.

"Manufacturers are finding it difficult to recruit skilled people and believe building more houses in Powys would provide a boost for businesses.

"At the moment a lot of people are travelling to Powys to work from Shrewsbury so more house building would enable more people to live and work in the county and contribute to the local economy."

A spokesman for Herefordshire Council confirmed that the consultation period for the West Midlands strategy ends next month.

"We will put the matter before our members at the end of this month and the final version is expected to come into force next spring," he said.