London’s SMEs move further East as Hackney prices rise
London continues to lead the UK in overall startup and small business activity, according to fresh data from GoDaddy’s Small Business Research Lab. However, rising housing costs in established hotspots like Hackney are prompting more founders to set up shop further east – reshaping the city’s entrepreneurial map.
GoDaddy’s research reveals that Tower Hamlets, Barking and Dagenham, and Redbridge are the fastest-growing boroughs for small business density in London across the past 12 months, all outpacing Hackney.
The new data comes from the GoDaddy Small Business Research Lab, an international research initiative that studies the economic impact of more than 600,000 small businesses in the UK and the attitudes of the owners who start and run them.
As part of GoDaddy’s study, each borough in London received a ‘Microbusiness Density’ count – which is used to track the rate at which the number of small businesses per 100 people is increasing year-on-year.
East London boroughs driving London’s position as the UK’s most entrepreneurial city
GoDaddy’s analysis shows that London is still the UK’s most entrepreneurial city, beating Aberdeen and Coventry in a recent ranking. However, at borough level, the picture has shifted in the past year.
Tower Hamlets, spanning much of the East End of London and the London Docklands, is now London’s fastest-growing borough for new start-ups. The area saw a 33% increase in microbusiness density across the past 12 months. This growth follows a concerted effort to boost independent businesses to the area. Last year, the borough council announced £700,000 investment to support entrepreneurs.
Further east, the borough of Barking and Dagenham also experienced significant growth, with microbusiness density rising by 29%. Meanwhile, Redbridge, a popular area for young families, achieved a growth rate of 25%. Newham saw a spike of 19% year-on-year.
Hackney growth rate slows as property prices soar
Hackney, known for its culture of small, independent businesses including coffee shops, bars, and restaurants, remains one of the top boroughs for microbusiness density overall, but its growth rate is below those of neighbouring boroughs, increasing 16% year-on-year. This means that Hackney places 27th out of the 32 London boroughs for microbusiness density growth.
This slowing growth is consistent with soaring property prices, as data from the Office for National Statistics show the average private rental property in Hackney increased by 9.3% year-on-year, to £2,550 a month.
Apsana Begum, member of parliament for Poplar and Limehouse, commented: “Hardworking small business owners and workers across Tower Hamlets serve our needs and support communities every day. I encourage constituents and all beyond to continue to support them by shopping locally.”
Mark Dixon, founder and CEO of International Workplace Group, the world’s largest provider of office and flexible workspaces, commented:
“There has been strong growth in businesses enabling their people to work closer to where they live, saving themselves time and money through reduced commuting and lower real estate costs”
“This shift is happening in towns and cities of all sizes right across the UK, including the East London boroughs of Tower Hamlets, Barking and Dagenham, and Redbridge. Business owners are rapidly realising the cost and productivity benefits of using a network of local workspaces as well as the work/life balance advantages for their people”
Alex Rosen, Global head of the GoDaddy Small Business Research Lab, commented: “East London has a rich history of entrepreneurialism, from its industrial past to its current day standing as a vibrant, cultural hub. The GoDaddy Small Business Research Lab findings show the wave of small businesses is spreading further east, as people move from Hackney to more affordable areas to start their new ventures. It’s heartening to see budding entrepreneurs building businesses in these communities, as that momentum will bring new jobs and opportunities.”