Rising rents sees number of Tech City start-ups fall by a third
Silicon Roundabout said to be a “victim of its own success” as property costs in East London continue to price start-ups out of the market...
The number of start-ups setting up in London’s Tech City, otherwise known as Silicon Roundabout, has fallen by more than a third in the last year – according to research by accountancy group UHY Hacker Young.
In the year to March 2015, the number of businesses in the area fell from 15,630 to 10,280 as rising rents and a lack of available office space in the East London technology hub has “forced them out of the market”.
Despite its start-up number dropping for the second consecutive year, the Silicon Roundabout area still had the highest level of business creation in the whole of the UK followed by the City Road area in N1 which saw a 479% increase from 1,450 to 8,400 over the same period.
The SE1 postcode covering Borough, Bankside and Bermondsey saw the third highest growth in start-ups, with 4,920 businesses created between 2014 and 2015 – although this was a 16% decrease on the previous year.
The top five areas for business generation were all London postcodes while Warrington, Nottingham, Leeds and Hove were the only places outside the capital to make the top 20.
Colin Jones, partner at UHY Hacker Young, said of the findings:
“Rising rents in the Silicon Roundabout area are causing many start-ups to choose other neighbouring areas of central London, such as City Road, as their first base.
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“Silicon Roundabout has almost become a victim of its own success. 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.”