Are UK start-ups being priced out of Silicon Roundabout?

New research links a drop in the number of Shoreditch-based start-ups to rising property prices

The number of people setting up start-ups 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 start-ups 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 start-ups that were initially attracted to the area are forced out into neighbouring areas. That is exactly why we have seen the tech start-ups heading away from Old Street to the City Road area."

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City Road and the surrounding area saw the fastest growth in new businesses, increasing by 479 per cent (1,450 to 8,400) since last year.

Borough/Bankside (down 16 per cent), North Finchley/Woodside Park (down 28 per cent), and Covent Garden/Leicester Square (up 413 per cent) make up the rest of the top five locations. 

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