The number of people setting up startups around Shoreditch’s Silicon Roundabout fell by more than a third in just 12 months, leading to speculation that companies are being priced out by rising rent prices.
New companies in the area dropped from a total of 15,620 to just 10,280 between March 2014 and March 2015, according to research from accountancy group UHY Hacker Young, marking the second year running that such a decrease has been recorded.
However, despite the falling numbers, Silicon Roundabout remains the top location for new business generation in the UK.
Colin Jones, a 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 [near Angel], as their first base.
“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 startups and larger firms to the area, such as Cisco and Amazon.”
Calling the area a victim of its own success, Jones added: “By attracting larger firms into the area, rents increase, available space decreases, and smaller startups that were initially attracted to the area are forced out into neighbouring areas. That is exactly why we have seen the tech startups heading away from Old Street to the City Road area.”
City Road and the surrounding area saw the fastest growth in new businesses, increasing by 479% (1,450 to 8,400) since last year.
Borough/Bankside (down 16%), North Finchley/Woodside Park (down 28%), and Covent Garden/Leicester Square (up 413%) make up the rest of the top five locations.
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