Number of businesses setting up in Old Street area falls by a third as London’s firms look elsewhere
London’s technology start-up scene may soon be looking for a new spiritual home following new data that shows how high rents are forcing many companies to move away from the capital’s Silicon Roundabout area.
Research from accountancy firm UHY Hacker Young found that the number of start-ups setting up on or near Old Street has fallen by more than a third in the last year – from 15,620 to 10,280.
High rents are being blamed as the number one reason for the shift, as a lack of available office space are forcing firms to set up in cheaper neighbourhoods nearby.
Instead of Old Street, it seems that London’s start-ups are now moving to several new locations.
This includes the City Road area, Silicon Roundabout’s northern neighbour, which saw the fastest increase in the number of new businesses out of the UK’s top five locations for start-ups with a 479 percent increase in the number of new companies, from 1,450 to 8,400 in the last year.
The postcode SE1, which covers Borough, Bankside, and Bermondsey, also kept its place in the top three areas in the country for new businesses. However, it experienced a 16 percent fall in the number of new companies from 5,850 to 4,920 over the past year.
The fourth and fifth places were taken by North Finchley and Woodside Park, and Covent Garden and Leicester Square. All of the top five postcodes for business generation were in London, with the only locations from outside the capital to make the top 20 were Warrington, Nottingham, Leeds, and Hove.
However despite the fall in numbers, the Silicon Roundabout area, covered by the EC1V postcode, is still ranked as the UK’s number one location for new business generation, seeing more than double the number of companies launched as in Canary Wharf (3,670).
“Silicon Roundabout has almost become a victim of its own success,” commented UHY Hacker Young partner Colin Jones. “By attracting larger firms into the area, rents increase, available space decreases, and the smaller start-ups that were initially attracted to the area are forced out into neighbouring areas.”
“Most of the new businesses will be smaller one-man bands such as individual programmers or media consultants, who are attracted to the area by the opportunities to collaborate with their neighbours.”
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