90 new businesses created every hour in the UK during first half of 2022
Despite rising economic concerns, 93 new businesses were created every hour across the UK in the first half of 2022, according to research by iwoca – one of Europe’s largest small business lenders.
Analysis of Companies House data reveals that over 402,000 businesses were registered in the UK between January and June 2022, an increase of 18% from 340,500 over the same time period in 2021.
London and West Midlands top list of areas to start a business
iwoca’s Small Business HotSpots UK 2022 reveals that London saw the highest rate of business creation in the first half of this year with 1,587 businesses being created per 100,000 people. This was followed by the West Midlands (571) and North West (554). Scotland appeared bottom of the list with a rate of 338 new businesses per 100,000, with the North East in second last place with 345.
When looking at how this changed between the first half of 2021 and 2022, Yorkshire and Humber saw the highest percentage increase in the rate of new businesses per capita created compared to 2021, with a 41% rise. This was followed by the East Midlands and Wales which both saw a 24% uplift over the same time period.
Camden tops the list of LAs as London dominates top 10
Camden saw the highest total number of businesses registered per 100,000 out of all UK local authorities, with 10,204 new companies. The second largest number of firms per capita were registered in Hackney (6,396) followed by 5,542 in Westminster. London’s local authorities make up all of the top 10. The analysis reveals that Manchester is the highest local authority outside of London, with 1,165 businesses created per 100,000, followed by Luton at 990.
The analysis also revealed significant proportional growth in the number of businesses outside of the main cities. Compared to the same time period last year, the Isle of Wight saw the highest percentage increase in the rate of new businesses created in any local authority with a 125% increase, followed by Blackpool (98%) and Oldham (87%).
Increase in new small businesses follows record high of job moves
The rise in new businesses sits alongside an increase in the number of workers seen moving jobs this year. Total job to job moves within the UK increased to a record high of 997,000 during the first quarter. ONS data records that a large proportion of these moves were driven by resignations – far more than redundancies – suggesting that some workers may be proactively deciding to quit their jobs and set up new businesses.
Seema Desai, iwoca’s chief operating officer said: “Despite the prevailing headwinds of an impending recession, we are encouraged to see that so many businesses have been created during the first half of this year.
“As many of these businesses struggle with cash flow in the coming months due to skyrocketing business costs, it is vital that lenders step in to provide a helping hand. We are proud to do our part at iwoca, adapting to the needs of small businesses. We do this mainly by deploying the latest embedded technology so that SMEs across the country can access our finance through the services they already use day-to -day.”
Cassie Ryan, owner of Birmingham based NOIR Footwear, said: “I have always dreamed of setting up my own footwear brand, and during the pandemic I decided to bite the bullet and actually do it. As a single parent on furlough, I enjoyed the extra time I was able to spend with my daughter, and realised that I wanted the flexibility not only to chase my dreams, but to also achieve a better work life balance.
“It’s been an incredible 12 months. I have enjoyed some successes whilst also learning from the challenges and mistakes along the way.
“There is no doubt that this is an exciting journey and I hope to continue to grow over the next few years. iwoca has played a vital part in providing us with the finance required to do just that.”
iwoca was accredited to the Recovery Loan Scheme, having distributed nearly £400 million to small businesses through the Government’s Coronavirus Business Interruption Loan Scheme (CBILS). In June 2020 the lender launched iwocaPay – an online buy now pay later invoice checkout to help small businesses get paid. iwoca is reaching 1.8 million businesses across the UK and Germany through its embedded lending technology, which allows businesses to access loans through a range of platforms such as accountancy software apps and digital neo-banks. The company has also recently launched free mental health support for all small businesses in the UK, in partnership with online therapy platform Spill.
- iwoca analysed Companies House data comparing business registrations between January and June 2019, January and June 2021 and January and June 2022. Using the complete postcodes provided in the data, we have matched these to upper tier local authority codes using a postcode look up. These include counties, metropolitan counties, inner and outer London and unitary authorities.
- Please note that as this data is self-reported by the businesses, some of the postcodes have been recorded incorrectly, are incomplete, or are brand new postcodes. This means there are ~4% of postcodes which we have not been able to match to a local authority and are not included in this analysis.
- The Companies House data product is a snapshot of live companies on the register. It is updated and published every month (link).
Top 20 local authorities by new business registrations per capita
|Local authority||New businesses registered in H1 2021||New businesses registered in H1 2022||% increase H1 2021 – H1 2022||Rate of new businesses registered per day (H1 2022)||New businesses in 2022 per capita (rate of businesses per 100,000)|
|Hammersmith and Fulham||2093||3,063||46||17||1,672|
|Barking and Dagenham||1885||2,949||56||16||1,347|
|Kensington and Chelsea||1746||1,850||6||10||1,290|
New business registrations per region
|Region||New businesses in H1 2021||New businesses in H2 2022||% increase H1 2021 – H1 2022||New businesses in 2022 per capita (rate of businesses per 100,000)||% increase in per capita 2021 – 2022||Rate of new businesses registered per day (H1 2022)|
|Yorkshire and Humber||19206||27029||40.7||493||40.73||150|
Source for number of new business: Companies House (link)
Source for population data: (link)
Job to job moves
Job to job moves are measured in the ONS Labour Force Survey. According to the ONS:
“Total job-to-job moves also increased…driven by resignations rather than dismissals, during the January to March 2022 period.”
Source: ONS Labour market overview, UK: May 2022 (link)
|Total job-to-job moves||Resignations||Dismissals and redundancies||Chose to leave previous job for family or personal reasons||Other reasons|
*figures for reasons for job move are not seasonally adjusted, which is why this figure differs from 997,000 (which is seasonally adjusted). The most up to date data published in July records the revised figure for Q1 2022 as 997,000. Source: ONS, July 2022 (link)
The ONS records job to job flows as “those who were employed in both quarters, but who in the latter quarter reported being with their current employer for less than three months, indicating a change of job between the quarters”, meaning the data only includes those people who have changed employers rather than changed roles within their current employer.