Rising rents and a lack of talent are stopping London’s technology start-ups from growing, according to a new survey.
70% of small and medium London tech businesses surveyed by YouGov said they faced barriers to expansion in the capital. The most common problems mentioned were the costs of running a business in London, a lack of suitably qualified staff and a squeeze on office space.
Rents in Shoreditch, home to a cluster of tech start-ups, have jumped by 46% in the past year, while available office space has fallen to its lowest level since before the financial crash.
The findings raise questions about David Cameron’s Tech City UK initiative, which promotes London as a hub for technology businesses but has been accused of increasing rents with its ‘hype’.
Wouter Schuitemaker, investment director of Business Birmingham, the group that commissioned the survey, said: “We believe there’s huge untapped digital potential outside of London and unleashing it will be to the immense benefit of the UK economy.”
Firms surveyed said the problems faced in the capital led to slower growth and losing out on potential business.
A Tech City UK spokesperson said: “This is not a picture we recognise. Rents in Tech City are still half the price of west London and cheaper than King’s Cross and the City.
“We're working hard with developers to help them understand the needs of growing tech companies to help increase affordable office space.”
