FEARS about building industry jobs being lost, soaring house prices and millions of pounds being sucked from the local economy have been voiced by planners and developers in the light of revelations that the number of properties to be built in South Lakeland every year is to be more than halved.

House building guidelines, expected to be contained in the Cumbria and Lake District Joint Structure Plan 2006-2016, will demand a radical reduction in the number of houses that can be built in rural South Lakeland to around 210 a year, compared to the 450 currently being constructed every 12 months.

South Lakeland District Council's Economy and Development manager Richard Greenwood said this more rigorous house building regime would further restrict the amount of new development in rural and green field areas - with serious implications for the construction industry.

He feared local firms would be forced to "throttle back their work forces" or diversify into other forms of building and he had concerns that it would also impact on the number of affordable homes being built in the area because developers would be unwilling to set aside land to construct cheaper properties with so few sites being made available.

House prices along with rents could also soar as South Lakeland's burgeoning population puts more pressure on existing housing stock.

"I think it's fair to say that the demand for housing in South Lakeland is insatiable," said Mr Greenwood.

"People want to live and retire here."

The structure plan, which will be out for consultation next spring, is a strategic document giving guidance about development across the whole of the county.

It is borne out of regional planning guidelines that suggest there should be a strategy of regeneration with the focus of development being in areas such as Barrow and West Cumbria.

Mr Greenwood said the situation was further complicated because the existing structure plan had set a target of 6,000 houses for South Lakeland up to 2006 - and that target had already been met.

"The building rate and rate of permissions has been higher than we had anticipated and we have got to control that," said Mr Greenwood.

"We are preparing some supplementary planning guidance to help us out between now and April next year.

We will be holding a workshop for architects, planners and building consultants to explain the changes."

Martyn Nicholson, the managing director of Kendal-based Russell Armer, which employs 120 people locally, said his company was already looking to acquire sites outside of South Lakeland.

He said that his company sourced supplies locally and contributed several millions of pounds of business to the local economy.

He said the company also trained a lot of apprentices and there was a danger those skills could be lost to the local area.

He added that the simple law of supply and demand would send house prices soaring.

"If people can't afford to live here and are forced to move to cheaper areas then where do the employers find employees?" he asked.

"This is just emerging and

people have not fully thought out the implications but they are likely to have a wide ranging effect on the local economy."

Mr Greenwood said the more restrictive approach to planning would spread across the whole district and in particular the national park where barn conversions would be badly hit.

Mike Henry, a director of Kendal-based New Brunswick Properties, which specialises in conversions, said: "If there are lost development opportunities around then it will have an impact on our company and the turnover we have."

Members of Lakes Parish Council discussed the desperate need for affordable housing in Grasmere at their meeting on Wednesday and fears were expressed for the future of the village school because young families were unable to buy houses in the area.

"It's extremely difficult for somebody with an ordinary sort of salary or job to live in Grasmere," said Coun Vivian Rees.

Meanwhile, moves to curb council tenants' rights to buy their own own homes in housing "hot spots" have been welcomed in South Lakeland.

Deputy Prime Minister John Prescott said new laws would be introduced enabling councils to suspend the discounts given to tenants in areas with major housing shortages.