London has long been Britain’s economical hub, and is often accused of drawing business away from the counties, but a recent study conducted OfficeBroker.com seems to imply that a reversal may be taking place. Thanks to the enhanced communication which has come with recent technological advances, combined with more cost-effective work spaces, many of the UK’s leading brands are being lured away from London’s lights and into the towns and cities of the Midlands and the north.
While London still holds many obvious business attractions, including a ready-made infrastructure, it is an undeniably expensive place to do business. The average cost of space per desk in the capital is a massive £820, with the majority of other major cities providing the same space for an average saving of £550 per desk – in Newcastle the average desk space is a mere £200. It’s clear to see why SMEs and start-ups might be tempted to stay away from the UK’s premier business district.
Although often referred to as England’s second city, Birmingham is another area where desk space is competitively priced, ranging from £150 to £400 per work station. The city, which was once known for its industrial prowess, has seen an influx of investment in recent years, and with the promise of HS2 offering a London commute of just 49 minutes – less time than it can often take to travel between the CBD and the suburbs – there’s little wonder that large, international corporations – such as HSBC – are starting to relocate their UK headquarters there.
Officebroker.com also surveyed early stage startups to see if London prices put them off of basing their business in the capital. 58% of those surveyed said they wouldn’t consider making London their startup home because of the cost of office space. 27% said they’d consider sucking up the costs associated with starting up in London for the first two years and plan to move out once they were established. 46% of those surveyed thought they would achieve a better work-life balance starting up outside of the capital.
However 67% of those surveyed said they worried that being outside of the capital may lose them a shot at investment and 52% worried about attracting the right talent outside of London.
Newcastle, Liverpool, Sheffield, Leeds and Manchester all also offer attractive office accommodation for less than £300 per desk, it looks like George Osborne’s ‘Northern Powerhouse’ may also be set to achieve success. Please see the table below:
City and average office rental:
Even cosmopolitan Edinburgh can give London a really good run for its money, with office space ranging from £175 to £350 per desk.
Of course, the price of business premises is only one area of consideration when contemplating location for most company owners: transportation costs play their part; environment is important if you want to attract a competent workforce; as is the cost of residential properties in the local area. For many talented young professionals, London just simply isn’t an affordable place to live, despite its many allurements. If a company can create an appealing work environment in an up and coming area where the cost of living is lower and the quality of life acceptably high, they stand a very good chance of tempting some of the best talent away from the ‘big smoke’ and into the UK’s regional capitals.
OfficeBroker.com CEO, Chris Meredith, comments: ‘London is – and I suspect always will be – a fantastic and vibrant place to live and work. It’s a global hub, and rightly so; it’s been building its prowess for around two thousand years. However, the rest of the UK also has plenty to offer.
‘New technology centres of excellence have been springing up all around the country in recent years, providing entrepreneurs with the opportunity to thrive whereas in the past they may have struggled to survive, thanks to the London-centric viewpoint and high cost of living and working in the capital.
‘Our study shows that today business has the chance to boom right throughout Britain. It only takes a little research, and office space for almost any budget can be quite easily found. ‘