A shortage of staff caused by high house prices is hampering the development of a key sector of the Oxfordshire economy.

Medical and bioscience companies are finding it increasingly difficult to recruit workers such as lab technicians, because they cannot afford to live in the area.

The problem was highlighted in the first report of the Oxford Networks research programme, a sweeping review of the county's technology base.

Rob Eyre, research manager at the Oxford Trust, which published the report, said: "The situation is that while medical and bioscience companies are well equipped at the top level with PHD people and high-flying management experience, hospitals and companies wanting laboratory staff are finding difficulties in recruiting.

"In other research, what we are finding is that rather than take on staff, organisations are cutting costs and not expanding at the same rate."

Mr Eyre said the problem was also linked to a shortage of suitable premises for the companies, and poor transport links.

The report is based on a consultation exercise with key figures from medical and biosciences.

Initial research is now taking place on the next report into materials, engineering and motorsport.

Prof John Wood, chairman of the Oxford Networks Steering Group, said: "This will enable us to build up a comprehensive picture of the opportunities and barriers for developing technology companies here."