- New index ranks the UK’s strongest business hubs according to population-to-business density
- Cardiff takes the lead, with one new company formed for every 10 people
- London’s ranks fourth, with one new company launched for every 43 people
New research conducted by private and commercial bank Arbuthnot Lathamhas revealed business density hotspots by analysing average population against companies registered in the last two years.
According to the newly launched Business Growth Index, Cardiff ranks as the UK’s leading hub for business growth in 2025, surpassing traditional economic powerhouses such as London and Manchester.
With the highest business density in the country, Cardiff saw one new business registered for every 10 residents. The findings come as entrepreneurial activity surges across the UK, with nearly a million new businesses registered nationwide – a 34% increase from the previous year.
| Location | Business Index Score | Total number of companies registered in 2 years | Population | One business opened for every x people |
| Cardiff | 99 | 35,943 | 361,469 | 10 |
| Manchester | 61 | 33,440 | 547,627 | 16 |
| Nottingham | 43 | 12,471 | 289,301 | 23 |
| London | 43 | 378,159 | 8,799,728 | 23 |
| Belfast | 35 | 11,690 | 333,871 | 29 |
| Milton Keynes | 33 | 6,810 | 207,057 | 30 |
| Glasgow | 32 | 20,493 | 635,640 | 31 |
| Harrow | 31 | 7,756 | 250,149 | 32 |
| Birmingham | 30 | 34,622 | 1,137,100 | 33 |
| Leicester | 30 | 13,807 | 464,395 | 34 |
Is Cardiff the best city to launch a business in 2025?
While London continues to dominate in total business registrations, Cardiff’s impressive business density highlights its growing appeal for entrepreneurs.Over the past two years (Jan 2023- Dec 2024), 35,943 businesses have been launched in the city, the second highest among the top 10, surpassed only by London. With an impressive overall score of 99, the Welsh capital stands well ahead of its nearest competitor.
Cardiff’s success can be attributed to several factors. The city’s affordability, particularly in its property market, provides an accessible entry point for entrepreneurs. High graduate retention from Cardiff University ensures a steady supply of skilled professionals, while the vibrant city centre and compact size foster close-knit networks and community ties that support new businesses. These factors combine to create an environment where entrepreneurship flourishes.
Angela Niering-Wren and Chris Stevens, Senior Commercial Banking experts in Arbuthnot Latham’s Real Estate Finance and Specialist Trading teams said:
“In recent meetings, Cardiff has been highlighted as a potential target for property acquisition,” Chris explains. “The property costs in Cardiff are lower compared to Bristol and the Bath area, potentially leading to higher yields due to the lower entry costs. Several of my clients have expressed interest in House in Multiple Occupation (HMO) properties, considering Cardiff’s robust student market.”
Angela agrees, saying, “Cardiff University has a strong retention rate of graduates who choose to stay after experiencing the city, creating a high-quality workforce. Its impressive research and development track record, and recent creation of Cardiff Innovation Campus, 17,500 square feet of office space, dedicated to bringing together thinkers and makers in a collaborative environment. Medical sciences, has also been a major driver of growth, with medical research companies siting their operations on the University Hospital of Wales campus Cardiff is attracting talent and innovation.”
When considering why Cardiff presents a compelling alternative to London as a business destination, Angela says, “The city offers a lower cost of living while maintaining competitive salaries that stretch further in a regional setting. The area also benefits from proactive promotion by Cardiff County Council, which actively attends trade events like MIPIM and UKREiif to highlight Cardiff’s advantages. As the seat of the Welsh Assembly, Cardiff provides businesses with closer access to key decision-makers, reinforcing its status as a dynamic and influential hub on the global stage.”
London’s fourth-place ranking shines a spotlight on its strengths and challenges
Despite ranking fourth in the Business Growth Index, London remains a crucial centre for commerce and innovation. However, it is interesting to note that the index shows areas around Greater London, such as Ilford and Harrow, beginning to show signs of business development – potentially due to businesses looking for cheaper alternatives in where they operate.
Paul Langham, Senior Commercial Banker on Arbuthnot Latham’s Specialist Trading Team, says that while London remains a global business hub, high costs and fierce competition make it tough for new businesses to launch and startups to scale there.
“Navigating complex regulations and economic and political uncertainties also add pressure, especially for firms reliant on international trade. Plus, with certain sectors already saturated, carving out a niche is harder than ever. Yet, despite these hurdles, businesses that can adapt, innovate, and differentiate still have a huge opportunity to thrive.”
On breaking into London’s business scene, Paul says, “London is an exciting but demanding place to start a business. Costs, strict regulations and competition can make entry tough, while securing funding and attracting talent in such a competitive market adds further challenges. But it’s important to acknowledge that these challenges are not isolated to London.”
London’s 2025 economic strategy emphasises resilience, innovation, and inclusivity. The strategy outlines plans to foster collaboration between businesses and academia, support SMEs, address inequalities to ensure inclusivity and invest in eco-friendly infrastructure and sustainable growth projects. By leveraging its skilled workforce and strategic location, London aims to maintain its global competitiveness while addressing challenges such as high costs and market saturation.
You can view the full release here: https://www.arbuthnotlatham.co.uk/insights/redefining-business-growth-insights-business-density
