Brighton and Hove has become a less attractive place to run a business because of rising house prices and the cost of living.

Key findings from the 2001 Best Locations for Business survey reveal the city had slipped to 55th place out of 100 locations in the UK.

Two years ago, the same survey put Brighton and Hove in 41st place at a time when the area was identified as the best place in the South-East to set up a company.

The only other Sussex location included was Crawley, which rose 24 places to 68th.

The survey was compiled from the responses of more than 1,000 senior executives across the UK.

Brian McDougall, principal consultant of survey organiser OMIS Research, said Brighton and Hove had slipped for a number of reasons.

He said: "The city has been very successful over the past few years but house prices have gone through the roof, meaning fewer people can afford to live there.

"Our research shows the city is one of the ten worst places in the country for house availability outside London."

Other reasons which made the city less attractive for businesses were lower unemployment, higher wages, a limited catchment area and a lack of office space.

Mr McDougall said the rankings had been influenced by changes in the criteria used this year, with employers putting greater emphasis on workforce availability and quality when deciding where to locate.

Mike Cook, Brighton and Hove area director for Sussex Enterprise, said: "These findings are consistent with our own discussions with companies. The cost of living here is discouraging people within a certain income range.

"Transport congestion and accessibility is also one of the major problems employers mention, as is the growing shortage of office space.

"All these things make people think about expanding elsewhere."

The survey was good news for Crawley, which improved its position because of the high availability of office space and its good transport links.

Although the town ranked lower than Brighton and Hove overall, it did beat the city in terms of the basic education of its workforce, it coming 34th in those rankings, compared with Brighton and Hove's 50th place.

Stephen Rostron, Crawley area director for Sussex Enterprise, said: "There have been several initiatives to attract business to the town and a lot of development. It's nice to see all the effort being rewarded and recognised."

The best place to run a business according to the survey was Greater Manchester followed by the West Midlands.

The worst were Corby, Grimsby and Portsmouth.