- GoDaddy research reveals East London leads small business growth, with the top three fastest-growing boroughs for microbusiness density located in the region
- Tower Hamlets posted the strongest annual growth rate (+33%), followed by Barking and Dagenham (+29%) and Redbridge (+25%)
- Hackney, a traditional entrepreneurial hotspot, recorded slower growth at just +16% year-on-year
- ONS data shows Hackney’s average private rental prices have risen 9.3% annually, reaching £2,550 per month
London’s entrepreneurial landscape is shifting eastwards as rising property prices in Hackney encourage founders to explore more affordable areas, according to new data from GoDaddy’s Small Business Research Lab.
The findings show that Tower Hamlets, Barking and Dagenham, and Redbridge have overtaken Hackney as the fastest-growing boroughs for small business density in the capital over the past 12 months.
Despite London maintaining its position as the UK’s top city for startups and small business activity, the research highlights how increasing living costs are reshaping where new businesses are launching across the capital.
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 ranking². 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 entrepreneurs³.
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.”