Two-thirds of entrepreneurs to be driven out of London by spiralling costs

Sharp rises in both housing prices and operating costs could spell trouble for ‘Silicon Roundabout’ as tech start-ups especially affected.

Almost two-thirds (63%) of London-based entrepreneurs and small business owners are considering leaving the city within five years due to rising personal and business costs, according to a report by Sussex Innovation.

The poll of 500 leaders associated with businesses that employ 20 people or fewer found that rising property prices were the main factor behind the potential exodus.

Almost eight in ten entrepreneurs (78.5%) cited this as the main reason they would struggle to run their business from London in the future.

Around one-quarter (26.6%) said that difficulties accessing finance and investment were the biggest issues for London start-ups, while securing top talent was the biggest concern for 24.1%.

>See more: A guide to the London tech hub

Technology start-ups appear particularly vulnerable to rising prices in London. Some 78% of tech start-ups may be forced to abandon ‘Silicon Roundabout’ within five years, according to the research.

Of those considering a move away from the capital, the South-East is by far the most popular choice for relocation. Around two-thirds (64.3%) of entrepreneurs said this would be their preferred destination.

Speaking at an event at a new business incubator in Croydon, shadow business secretary Chuka Umunna told Growth Business similar sites can go some way to ensuring a “more balanced economy within London”.

“One of our main aims if we were in office would be to have a better balanced economy, and that doesn’t just mean between the regions of the UK,” he said.

“A lot of people talk up Tech City in East London and good luck to them, but there are other places that can offer the same at more competitive rates.”

Further reading on business: Ensuring the future of the Sharing Economy

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.

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