The number of start-ups setting up in the Silicon Roundabout area has fallen by more than a third in the last year as companies are priced out of the area by rising rents, according to research by UHY Hacker Young, the national accountancy group.
Last year, more than 15,000 new businesses were started in the UK’s answer to Silicon Valley. But that figure now stands at just 10,280, UHY Hacker Young said.
Despite the fall, the Silicon Roundabout area, covered by the EC1V postcode, is still the UK’s number one location for new business generation. It saw more than double the number of companies launched as in Canary Wharf (3,670), one of London’s key business hubs and covered by the E14 postcode.
Colin Jones, partner at UHY Hacker Young, said: “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.”
The City Road area, to the north of Silicon Roundabout and covered by the N1 postcode, saw the fastest increase in the number of new businesses out of the UK’s top five locations for start-ups. It saw a 479% increase in the number of new companies, from 1,450 to 8,400 in the last year.
“However, Silicon Roundabout is still at the forefront of national business creation, and it is still the epicentre of the UK’s technology industry, attracting both start-ups and larger firms to area, such as Cisco and Amazon,” Mr Jones added.
“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.
“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.”