A recent study by UHY Hacker Young outlined a significant fall in start-ups around Silicon Roundabout in the last year (ending 31st March 2015). Falling from 15,620 to 10,280, this rapid decline of new businesses comes hand in hand with a rise in rents and lack of available space.
Old Street has become synonymous with innovation and the digital and tech industries and has housed Facebook, Amazon, Google and Intel over the past few years. Attractive to start-ups for this very reason, today’s new businesses are finding competing with larger firms an increasingly difficult task, with rents in Shoreditch doubling in the last two years and currently well on their way to £70 per sq ft.
The EC1V area still dominates national business creation, but this success has allowed small start-ups to be out priced. Initially intent on space around Silicon Roundabout, small companies are now being driven out to neighbouring areas, in particular City Road N1 (annual increase of 479%).
Despite falling numbers, evidence clearly shows Silicon Roundabout is still the number one spot for new companies and it remains the focal point of Britain’s, and arguably Europe’s, technology industry. Behind San Francisco and New York, East London’s ‘Tech City’ is the third biggest technology start-up cluster in the world stretching from Old Street Roundabout all the way to the Queen Elizabeth Olympic Park in Stratford.
As well as Silicon Roundabout and City Road, Hacker Young’s study also acknowledged Borough & Bankside, North Finchley & Woodside Park and Covent Garden & Leicester Square as having the highest volume of new businesses in 2014-15. (Covent Garden & Leicester Square increasing 413%)
With smaller businesses beginning to look elsewhere for affordable office space we can expect to see Start-up growth areas such as City Road, Hackney Wick and King’s Cross, as companies attempt to take refuge from high rents.
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