Top 5 Cities to Start a Business in the UK

By Hernaldo Turrillo - Jun 08, 2020
Top 5 Cities to Start a Business in the UK

A new report by Raisin reveals which city in the UK is the best to invest in when starting a new business in 2020.

Over 670,000 new businesses start in the UK every year, however, it's been reported that 20% of those businesses fail in their first year - and it's important to get your location right from the get-go to give you the utmost chance of survival.

The study analysed business survival rates as well as office costs and unemployment figures of 20 of the biggest cities in the UK to discover which one would be best to start a new business in.

The data also revealed where house prices have risen the most across the country to show where Brits will be able to earn more money from property.

Leicester is the best city in the UK to start a business

The study showed Leicester is the best city in the UK to invest in for both starting a new business and buying a property. The business survival rate in the city is over 91% and house prices have risen by 28.3% in the past two years, meaning the property market is booming in the midlands city. The average house price in Leicester is £246,000 and is rising.

Leicester is home to some of the UK's largest businesses such as Next, Barratt Developments and Dunelm so it is the perfect place to start a new business.

The index ranked 30 of the UK's biggest cities by 5 factors (working population, business survival rate, hours price changes, job claimant rate and price per sq.ft of office space) to determine which city is the best to invest in.

Bristol is the second best city to start a business in. From idyllic landscapes to vibrant street art, Bristol is known for its culture and history of innovation. An amazing place for startups and SMEs, with survival rates over 1 year at 88.7%, Bristol is thriving with businesses to develop and experience to share. The exceptional universities on its doorstep mean that the bright and brilliant minds of the future will likely be looking for work in the area. The working population of 317,778 makes it an ideal area to invest in creative, tech and digital.

The city of culture for 2021, Coventry is going from strength to strength, making it the perfect place to invest in. Closing the top 3, and as inward investments drive energy and community towards the growth of the city, more and more people are striving to see it succeed, with house prices following suit with a 28.1% increase. Known locally as Silicon Spa, Coventry is a hub for advanced manufacturing and gaming industries, making it the natural choice for some sectors, with a prosperous workforce of 245,227 leaving plenty of room for development.

Top 20 cities to start a business in the UK

In 4th place and home to beautiful architecture, Chester is the perfect place to invest in. Well connected with public transport and motorways offering easy access to major cities such as Manchester and Liverpool, as well as the rest of the North West. A home in Chester could be ideal, and it’s also the perfect location to start a business, as more and more people look for prosperous areas to develop in outside of London. Chester’s working population is thriving as well, with a 90.6% business survival rate making it more likely to succeed.

The top 5 is closed by the seaside city of Brighton and Hove. This city is known for its beautiful scenery and close proximity to London. A vibrant and thriving city that maintains a community feel, it is well sought after by those looking to settle down and those looking to start a business, so it is no surprise that it made it into our top 5. An affluent city with a passion for supporting independent, creative and new businesses, and this is reflected in the 90.3% business survival rate. A flourishing digital and tech industry means that new businesses are escalating alongside house prices, which have increased by 17%, showing Brighton and Hove is on the up.

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The city investment index was populated by the cities which fulfilled all data queries for evaluating the working population, the rates of business survival over 1 year, the variance in house price changes, the amount of people per job opening and the price of office space per square foot to find the best cities to invest in. Each city was allocated a ranking score out of 40 for each factor with an overall ranking out of 200 creating the index.


Workforce population (16-64)
MYE2: Population estimates: Persons by single year of age and sex for local authorities in the UK, mid-2018.

Businesses that opened in 2017 that survived their first year.

The average House Price % change from 2015-2019.

Claimant Rate 2020
Figures based on Claimant rate – which shows for example, as of March 2020 Cambridge has 0.3 job vacancies per claimant – Adzuna

Average cost of office unit

Using the filters “Top 100”, “most popular”, offices – by city. Then calculated the average price per sq ft for the most popular 100 offices per city – Zoopla

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