Entrepreneurial Spirit: The Cities and Industries Powering New UK Business

Location is one of the most important decisions when launching a new business, shaping everything from demand to long-term stability and growth potential. But with so many thriving hubs across the UK, narrowing down where to launch can be a tricky decision.

As business insurance experts, we wanted to dig deeper into the UK startup landscape to uncover the locations and sectors leading the way in new business creation.

Using Companies House data we analysed every UK postcode area to identify how many new businesses were registered in 2025, along with the number of new businesses formed per industry SICcode (a 5-digit number used to classify a business’s main economic activity).

We then compared these figures to local population data calculate the number of newly registered businesses per 1,000 people in 2025, allowing for more accurate comparison between areas of different sizes.

This allows us to reveal the areas of the country where the most new businesses are being created relative to their population, highlighting entrepreneurial hotspots that may be overshadowed by other larger cities when looking at the number of businesses formed alone.

From this, we have been able to identify the UK’s key startup hubs and the sectors driving the most new business activity – revealing where entrepreneurs are flocking to set up shop, both inside and outside London – as well as the sectors gaining the most traction.

Manchester named the most entrepreneurial UK city, outside of London

When it comes to the UK’s most entrepreneurial locations, based on the number of new businesses registered in 2025 per 1,000 people, Manchester takes the top spot after London, with 18.5 new businesses created per 1,000 people in 2025. With the city earning the nickname "Silicon Canal" for its thriving tech scene, the northern location is a bustling hub for tech entrepreneurs.

Watford follows, with 15.3 businesses created per 1,000 people. Due to its excellent transport links, the city is home to numerous large businesses, including JD, Wetherspoon, TK Maxx, and Majestic Wine.

Slough rounds off the top three most entrepreneurial cities outside of London, with 15.2 newly registered businesses per 1,000 people in 2025. Home to one of Europe's largest privately-owned business parks, the Slough Trading Estate, which houses over 400 businesses and includes over 600 buildings, the South East location is a popular destination for businesses to settle.

The UK location producing the fewest businesses per person is Dumfries in Scotland, with just 3.7 new businesses registered per 1,000 people in 2025 – or 539 new companies in total. Rich in history and culture, the small Scottish town is known for being quieter than other Scottish tourist spots. Whilst some businesses may prefer setting up in a busier, bustling central location, Dumfries could be the perfect spot for entrepreneurs seeking a quieter setting.

The London boroughs producing the most new businesses per 1,000 people

While the UK offers many great locations for businesses, the capital remains the standout choice for entrepreneurs and start-ups seeking to capitalise on new opportunities. With 284,814 new companies registered in total in the UK’s capital city in 2025, our analysis shows that some areas within the capital are significantly more entrepreneurial than others.

Areas under the West Central London postcode (WC) include vibrant hubs like Soho, Mayfair, St James's, Victoria, and Pimlico, and trump other London boroughs for the number of new businesses registered here per capita. With 1,314 businesses created per 1,000 people in 2025 across these areas, the data indicates a high concentration of startup activity. These areas are central with excellent transport links, making them a desirable location for new businesses.

Following is East Central London (areas within the EC postcode). Whilst the location boasts more new businesses registered overall than any other London location (42,486), this works out at 1,140.1 new businesses per 1,000 people. Covering areas like Shoreditch, Liverpool Street, and Hoxton, East Central London has rapidly become a bustling business centre and is known for its vibrant music and culture.

West London takes third place as the most entrepreneurial London borough, with 54.8 new businesses registered per 1,000 people last year. Whilst this is considerably less than in the city's central areas, the location, which covers the postcode area W, is known for its historical significance and various green spaces to explore, making it the ideal startup spot for people looking to immerse themselves in a business rooted in culture.

Professional Services emerging as the most popular new business type in 2025

As well as the most popular locations for starting a new business, we also looked at the industries producing the most startups in the UK to identify the fastest-growing sectors.

Most Popular New Business Type Registered In 2025

Taking the top spot, professional services are outpacing any other industry in the UK startup market. Making up 15% of all businesses formed in 2025, businesses including solicitors, financial services, and human resource companies, are growing faster than any other UK sector. Primarily corporate roles, this sector is projected to continue to grow, with recent UK government strategic planning aiming for the UK's Professional and Business Services (PBS) sector to grow by 2035.

Retail follows closely behind, with 14% (164,353) of new businesses formed in 2025 in this sector. As high street footfall declines and brick-and-mortar shops continue to close,this data could be more reflective of online retailers, who are capitalising on the thriving dropshipping scene. As an e-commerce model, dropshipping allows businesses to operate without warehouses or upfront stock costs, with products shipped directly from suppliers to customers.

Rounding off the top three is real estate, with 13% of businesses registered within 2025 in this category, which includes lettings, property management, consulting, and development.

Least popular new businesses registered in 2025 in the UK

Whilst the UK startup landscape is, as a whole, thriving, some industries such as mining and quarrying, electricity, gas, steam, and air conditioning supply have seen fewer registrations for new businesses.

The right insurance, and the right location

Whether you're starting up in a bustling city or a quieter region, making informed decisions about location and sector can shape your long-term success. If you're planning to start a new business, compare business insurance to protect your business.

Methodology: Using 2025 Companies House data, we scraped the postcode location data for all the UK SIC postcodes to reveal the UK locations where the most new businesses are registered. We also scraped the number of new companies registered across 2025 for 729 different industry sectors, grouping these by broader industries to reveal the fastest-growing UK startup sectors. The ranking is based on the number of new businesses registered per capita.

Four postcode districts (HR5, CF14, IP28 and BH16) were removed from the analysis, as the number of registered businesses in each was significantly higher than the average for surrounding postcodes in the same area, suggesting the data was not representative of genuine local entrepreneurial activity.

Population data by postcode area was taken from the 2021 Census data for England and Wales, Northern Ireland and the 2022 Census for Scotland.