UK startups shift outside Central London, report finds

Hoxton Mix found that 60% of UK startups now launch outside Central London, based on analysis of 48,310 virtual office subscriptions recorded since 2017.

The study suggests a marked shift from earlier years, when 35% of startups in the dataset were launched outside Central London. By 2025, that share had risen to three in five, indicating that more founders are setting up businesses away from the capital's traditional centre while still using a London mailing address.

The figures come from virtual office subscriptions across 117 UK locations. A more recent sample, covering 10,334 new sign-ups between January 2025 and March 2026, showed that 46% came from just 10 locations, including commuter-belt towns in Surrey, Berkshire, Kent, Essex and Hertfordshire.

Together, the numbers add to evidence that startup formation is spreading beyond long-established urban hubs. London remained the single largest concentration in the rankings, with 4,233 sign-ups in the 2025-2026 period covered by the report, but the rest of the UK accounted for more than 5,000.

Commuter Shift

The data also showed that smaller towns within commuting distance of the capital were competing directly with major regional cities for new business registrations using virtual office services. Kingston upon Thames recorded 192 new businesses in the recent period, ahead of Birmingham on 188 and Manchester on 122.

Harrow, Kingston upon Thames and Guildford were among the most popular postcodes for founders based within an hour of London, according to the analysis. The pattern suggests that entrepreneurs are increasingly choosing locations with lower operating costs or different working arrangements while retaining access to clients, investors and networks in the capital.

East London remained a strong draw within the capital. The report described it as the UK's startup virtual office capital, with 927 new businesses registered between January 2025 and March 2026, and 2,440 since 2017.

The report linked the trend to changes in working habits and company formation patterns across the wider small business market. The UK's private sector business count reached 5.7 million in 2025, and 89,515 new businesses were added to the company register in the first quarter alone, according to figures cited in the research.

Hoxton Mix argued that virtual office sign-ups can indicate broader movement in the SME market because they show where founders choose to establish a registered presence at the point of formation. Nearly half of UK virtual office sign-ups in the most recent period were registered outside major cities, it said.

Search Trends

The geographic shift was accompanied by rising online search interest in more location-flexible forms of business building. Google Trends data cited in the report showed search interest for the term "anywhere entrepreneur" increased by 150% between May 2024 and December 2025.

That increase does not by itself explain where companies are registering, but it adds to evidence of a broader move towards remote and hybrid working among founders and small business operators. The report said technology-led businesses and professional services were among the sectors contributing to the change.

Methodology published alongside the findings said the dataset was extracted in March 2026 and categorised using primary UK Standard Industrial Classification codes. Businesses were grouped into 21 industry sectors to identify patterns in virtual office adoption and startup activity.

The location analysis used the registered business address attached to each subscription. That means the figures reflect where businesses chose to establish their official address through a virtual office service, rather than necessarily where founders live or where staff work day to day.

Chris Sees, Co-Founder and Chief Executive Officer of Hoxton Mix, said: "Building a strong, healthy and profitable business doesn't mean you need to invest in a huge central London office. Our latest report shows that founders are choosing to set up just outside the city, creating vibrant SME startup hotspots within a commutable 60-minute radius. Services like virtual office solutions give them the flexibility to scale, connect and grow in a way that suits them, while still having a prestigious London address when it matters."

He added: "At Hoxton Mix, we expect this trend to continue accelerating. As technology and artificial intelligence continue to reshape working practices, startup formation is likely to become increasingly decentralised, with more founders basing themselves outside traditional city hubs rather than in them, so they are not tied to a single business location."