Sky-high rents are beginning to dampen the enthusiasm of would-be tech entrepreneurs looking to set up shop in London’s Silicon Roundabout.
The number of start-ups established near the Old Street Roundabout dropped to 10,280 in the 12 months to March, down roughly a third compared with the 12 months to March 2014.
The research published today by accountancy firm UHY Hacker Young showed firms were beginning to look further afield.
“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,” said Colin Jones, a partner at UHY Hacker Young.
The number of new businesses setting up near City Road rocketed by 479 per cent in the 12 months to March to 8,400. However, Silicon Roundabout remains the top destination.
“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 the area, such as Cisco and Amazon.”
“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.”
The third, fourth and fifth most popular places to start a new firm are Borough and Bankside, North Finchley and Woodside Park, and Covent Garden and Leicester Square.
Borough Market has been extensively redeveloped and the construction of the Shard as the tallest building in the EU has put the area on the map internationally,” said Collins.
A much larger number of entrepreneurs were attracted to Covent Garden and Leicester Square in the year to March, with the number of firms set up there soaring to 3,690 from 720 in the previous 12 months.