The UK commercial property market is constantly changing, with a weakened economy making things even more difficult for new business owners. At the start of 2023, 83 per cent of commercial property owners believed the market was already in a downturn, up from 81 per cent a quarter before.
As inflation and rent prices steadily increase, the retail sector continues to tackle rising rent, stock and energy costs.
To gain insight into the current state of the market, Approved Business Finance has looked at the 50 largest cities in the UK and analysed current commercial retail listings data from Rightmove to find the average price of rent and cost per square foot. Using specific data points like the footfall recovery score from the Centre for Cities and the number of closed banks on Which?, the research reveals the high streets and cities that are bouncing back and are the most promising for new businesses.
While looking at a potential city to start a new business can be pricey with increasing costs in rent and stock, leaning towards an asset finance agreement might help kickstart the process.
Find out below where your next business venture is best to take place.
Where is the best city for the next business venture?
According to the data, Plymouth comes out on top as the best city to start a business. Featuring ocean views of the south Devon coast, the city ranks first place for having relatively cheap rent and has one of the highest footfall recovery scores of 165 - returning back to pre-Covid levels which for new business owners could lead to a lot more sales.
Coming in second is Dundee with slightly lower rent but has an average cheaper per sq. ft - at £16.98. Although, the city only has 4 spaces available to rent and a growing recovery footfall rate of 140 showing that is fast becoming a popular spot for potential businesses.
Making up the top 5 are Sunderland, Telford and Stoke on Trent, with all three having an average rent of less than £2,000 - with Stoke on Trent having the cheapest rent out of all the cities at just £690 per month.
Interestingly, smaller cities are seeing better footfall recovery traffic and fewer empty commercial spaces which could reveal that bigger towns are making slower recovery progress than smaller ones after Covid-19.
The 10 Cities Representing the most challenges to new businesses:
The Capital, London, takes first place as the most challenging city to start a new business. However, for those who can afford the high rent, prospective business owners have plenty of choice in terms of location, with the highest number of commercial properties available; over 400 empty spots.
Gloucester comes in as the second most challenging city for new businesses due to an average cost per square foot of £94.87.
Many people relocated during the pandemic and with rising bills for business owners, this could be a reason why the bigger cities are seeing less of a decline when it comes to the ranking factors.
Deciding to start a business or branch it further out to a new area can be daunting and securing commercial property finance can help to streamline the processes and ease the financial pressures slightly.
Methodology:
To find out which areas of the UK are the most and least expensive for commercial properties, we looked at five key indicators to create the index score:
● Average cost of commercial properties (based on most recent available date on Rightmove)
● Average cost per sq. ft (based on most recent available date on Rightmove)
● No of closed banks and upcoming closed banks (based on recent data on Which?)
● Number of empty commercial properties (based on most recent available date on Rightmove)
● The overall footfall recovery score (based on data from the Centre for Cities)
We gave each location an index score out of 100 for each separate data point with equal weighing, adding up each score over the five data points to calculate an overall inclusion Index Score out of 500.
*Data correct as of 16 May, 2023.