The UK’s entrepreneurial landscape is evolving, and Cardiff is leading the charge. In 2024, nearly a million new businesses were registered across the nation, a staggering 34% increase from the previous year. Yet, Cardiff’s story stands out. With one new business for every 10 residents, the city boasts the highest business density in the UK, offering a compelling glimpse into a new centre of entrepreneurial energy.
While London still leads in absolute numbers, Cardiff’s remarkable business density signals a shift. The city’s combination of affordability, talent retention, and a well-connected business community has created an environment where startups thrive. This challenges the long-held assumption that major business growth must centre around the capital and suggests that smaller cities can take a leading role in shaping the UK’s business future.
Business density data highlights Cardiff as a standout performer, far outpacing London, which sees only one business per 23 residents. Other major cities, including Sheffield, Leeds, and Edinburgh, trail even further behind. Sheffield, for example, records just one business per 59 residents. Cardiff’s affordability, particularly in the property market, plays a crucial role, providing an accessible entry point for entrepreneurs. With Cardiff University retaining a high percentage of its graduates, the city also benefits from a steady stream of skilled professionals. The city’s compact and vibrant centre fosters a strong sense of community, enabling business networks to flourish.
As the top-ranking city in the Business Growth Index, Cardiff presents itself as one of the UK’s strongest business hubs, making it an attractive destination for new companies in 2025. Industry experts note that while Cardiff has always seen a high number of registrations due to the presence of Companies House, the recent surge is driven by deeper economic and structural advantages.
Commercial banking specialists suggest that Cardiff’s increasing appeal for property investment is a major factor, citing its affordability compared to neighbouring Bristol and Bath. Lower entry costs result in higher yields, attracting investors to House in Multiple Occupation (HMO) properties, particularly given Cardiff’s thriving student population. Additionally, the city’s growing reputation in research and development has been a key driver of business activity. The Cardiff Innovation Campus, spanning 17,500 square feet, is fostering collaboration between industry and academia, while the University Hospital of Wales is attracting medical research firms, bolstering the city’s innovation economy.
Infrastructure improvements further cement Cardiff’s appeal. The removal of toll fees on the Severn Bridge has improved connectivity with England, making the city more attractive for businesses and commuters alike. Meanwhile, the redevelopment of Cardiff’s central bus station has significantly increased the availability of modern office space, balancing the supply of both premium and more affordable workspaces.
Cardiff’s business-friendly climate is actively promoted by Cardiff County Council, which engages in high-profile trade events such as MIPIM and UKREiif to showcase the city’s strengths. The presence of the Welsh Assembly also offers businesses easier access to policymakers, reinforcing Cardiff’s status as an influential hub on both a national and global scale.
Despite Cardiff’s rise, London remains a powerhouse, albeit with significant challenges. Industry experts acknowledge London’s advantages but warn of the high costs, intense competition, and regulatory hurdles that new businesses must navigate. While London continues to attract global talent and investment, startups must differentiate themselves to succeed in a highly saturated market.
Looking ahead to 2025, London’s economic strategy prioritises resilience, innovation, and inclusivity, aiming to support SMEs, foster collaborations between businesses and academia, and invest in sustainable infrastructure. By leveraging its global influence and diverse workforce, London seeks to maintain its competitive edge despite rising costs and market saturation.
This analysis is the first step in exploring the UK’s evolving business landscape through the UK Business Index Tool. By examining key trends and incorporating insights from industry experts and business leaders, further opportunities and challenges shaping the future of entrepreneurship in the UK will be uncovered.
Arbuthnot Banking Group PLC (LON:ARBB), trading as Arbuthnot Latham, provides private and commercial banking products and services in the United Kingdom. Founded in 1833, Arbuthnot Banking is based in London, United Kingdom.
