The pros and cons of renting office space in London

Pros:

Great access to clients

There was an incredible 841,000 private sector business in London at the start of 2013 and that number is growing every day; meaning that London had more companies than any other region in the UK. Depending of course on your target market, moving to London puts nearly a million clients right on your doorstep and the networking potential is naturally better than anywhere else in the UK, with loads more networking events and daily exhibitions at London’s conference centres such as Earl’s Court Excel and Olympia.

A prestigious location

It’s hard to deny that a London address instantly adds an air of prestige to your business.  Everyone knows the capital city is expensive, so it gives the impression that you must be doing alright.  You could however get the same effect far cheaper by renting a virtual office.

World class facilities

Whether you need research, conference facilities or technology, London is just better than everywhere else. It has it all.

Social and cultural diversity

London’s incredibly diverse culture makes it a great place to work and means you’ll never be short of something to do.  Some of the UK’s best museums, West End theatres  fantastic restaurants, bars and endless gigs, are all right on your doorstep. London is such a beautiful city that there’s plenty to do that costs nothing too: simply walking around, taking in the architecture, relaxing in Hyde Park or taking a picnic on Primrose Hill and watching the city light up as the sun goes down.  Check out Time Out London if you need any more convincing.

Good transport links

London has a whopping six international airports and several smaller airports, together making the busiest airport system in the world.  If your busjness sees international clients, this is a huge benefit.  Eurostar also connects London directly to major European cities, and London’s train systems link all over the country.  London will also benefit from the HS2 high speed rail link providing mega fast transport to and from other major cities across the UK.  Last but not least, the tube and bus networks make it easy (sort of) to travel around the City, if you can deal with feeling like a dehydrated sardine during rush hour.  Good transport links mean you can attract the best staff and make it easy for prospective customers to visit you.

Buzz

Without doubt, being surrounded by like-minded people who are passionate and creative rubs off on you.  London will never be short of inspiration, talent and drive, and this can help make your business more productive and effective.  Both London generally and Camden are in my top ten office space locations, not least for the abundance of companies innovating and creating there.

Access to talent

Around 8 million people live in London, making it the largest city in the UK by far (Birmingham is the second largest at around 1 million).  London also has one of the largest concentrations of universities and higher education institutions in the world.  So it’s easy to attract good talent when it comes to hiring staff.

Pricing opportunities

Everything is (at least) a little more expensive, business costs are high and London is prestigious.  So people do expect to pay more for things and naturally you can get away with charging a higher hourly rate than, say, a company located in Blackpool – although you might not feel the full benefit as your expenses will be higher too.

Cons:

Poor air quality

The air quality varies through London but is generally poor.  Recent analysis found that concentrations of the toxic exhaust pipe gas nitrogen dioxide (NO2) exceeded EU levels by over 50% in some areas, and was over the safety limit in 15 out of 32 places tested.  As if the stress of business in the capital isn’t enough, poor air quality can cause ill-health and shorten lives.

Expensive office space

As you might expect, the cost of renting an office in London is far higher than practically anywhere else in the UK.  An office near silicon roundabout will set you back about £51 per square foot per year, with Covent Garden closer to £82 and Mayfair at £127. That means a small office of 1,250 square foot will cost you nearly £64,000 per year at the lower end of the scale, and fees are on the increase.  If the pros of renting office space in central London aren’t outweighing the cons for you, better to rent an office in Greater London and commute in for meetings from time to time.  Alternatively, consider shared offices or serviced offices which can work out far more economical.

High rates

Business rates in London are higher than anywhere else in the UK.  In 2011, Westminster rates were on average £123,600 per annum, about 4 times the Country’s average. Contrast this with the business rates in East Tendring which were on average just £9,300, or South West Torridge which were £10,100.  Again, the way to get round this is to choose shared or serviced office space, where your licence fee includes a contribution to business rates for the building.

Unbearable traffic

Although London copes pretty well with the amount of traffic it has to deal with given its size, the traffic is still horrendous and London is effectively one big traffic jam.  The congestion charge has done little to help that, either.  Even short journeys take an insane amount of time and it’s unsurprising a lot of people have turned to the good old fashioned bicycle, with over 540,000 journeys been made in London each day.  Barclay’s Bike Hire scheme is a great option for journeys around the city.  You can pick a bike up from any of their docking stations and leave it at your destination, or anywhere you like – there’s stations all over the city – and it’s pretty cheap.

Expensive parking

If you’re considering office space in London, make sure you research your parking options well in advance as regular car parks are pricey. NCP rates for 6 – 24 hours are around £40.00 – contrast this with Nottingham where a typical day rate is £15.00. Tube stations in some of the outlying areas (such as Finchley Central) are popular parking alternatives, charging typically around £4.00 for the day and £1.50 at weekends.

High competition

You might be in the thick of the action but competition is sky high – for EVERYTHING.  Whether you want press attention, funding, resources – even space – you’ve got to fight a lot harder for it.

High wages

Wages are much higher in London – with the average wage nearly twice that of the East and West Midlands.  While elsewhere in the UK the average pay of the typical worker has dropped back to around the level it was at the turn of the millennium, London wages have not been affected in the same way.  The cost of hiring is therefore more expensive although arguably you benefit from a better pool of candidates.

High living costs

If you’re thinking of moving yourself into London too, keep in mind that even a one bedroom property in Clapham is going to set you back around £320 a week.  Commuting into the city is a popular option and there are many locations open to you along the ‘commuter route’.

Everything takes longer

Whether you’re popping out for a sandwich, doing a little shopping or trying to get your car washed, literally everything takes longer.  This isn’t great for start ups, freelancers and small businesses where time comes at a premium.

Everything is more expensive

We’ve talked about property costing more, rates costing more and staff costing more but literally everything in London – even your lunch – is expensive.  This is a cost easy to forget when weighing up whether you can afford to move your business to the big smoke.

London without doubt has an amazing vibe, a tonne of creativity and more opportunities than any other UK location. If that’s enough reasons to put up with the crowded tubes, packed streets and expensive sandwiches, then office space in London might well be the right option for your business.