Across the UK, new tech ventures are thriving in major hubs outside of the M25, and with residential property in the capital still costing 13-14 times the average local salary, plus rising office rents, the number of start-ups that are choosing the regions over the capital is rising.
The UK’s tech start-up culture is going from strength to strength. When more than 10,000 start-ups launched in 2017 it smashed all previous records, but last year the figure was close to 12,000 start-ups. While 40% of these are still being launched in the capital, the regions are rapidly closing the gap.
London, where Shoreditch’s Silicon Roundabout has long been considered UK tech’s spiritual centre, still features strongly but there has been a surge all over the country. At the end of February, data from Companies House revealed that the number of new tech companies launched in the UK rose by more than 14% in 2018. There were 11,864 software development and programming businesses incorporated in 2018, up from 10,394 companies the year before.
London had the highest number of tech start-ups with 4,752, a 14% increase in line with the national average. This was followed by the southeast with 1,398, a 2% rise, while the northwest recorded 1,079 new tech firms, a 48% rise on the previous year. The number of tech firms grew across every UK region except Scotland where numbers fell 4% to 444 and the northeast where numbers remained flat at 175.
David Blacher, at accountancy firm RSM, which compiled the figures, said: “Given the current economic uncertainty, it's fantastic to see that tech start-ups have continued their upward trajectory. While the rate of increase didn't match 2017 when we saw a 60% jump, the numbers show that entrepreneurs are continuing to innovate and venture capital, private equity and traditional funders are still lining up to commit funds to the right projects.
“London and the southeast still dominate, but we are also seeing encouraging signs of increased activity across the regions, particularly in the northwest. Tax incentives such as the Enterprise Investment Scheme, R&D tax credits, video games tax relief and the Patent Box regime are all playing their part in helping to fuel this growth.