Britain’s entrepreneurial spirit remains robust, with 84 new companies launched every hour in the first half of 2025, according to fresh analysis from SME lender iwoca. The annual Business Hotspots report, which utilises Companies House data, revealed that over 363,000 businesses were registered between January and June 2025. However, this signifies a 21% reduction compared to the same period in 2024, marking the first nationwide decline since iwoca initiated its index in 2021.
The decrease follows reforms to Companies House rules in spring 2024, which heightened registration requirements and fees to combat fraud and tax evasion. Persistently low confidence among small and medium-sized enterprises has also impacted start-up activity.
Wales experienced the most significant decline, with new registrations down 39% year-on-year. Cardiff saw the steepest drop among local authorities, with numbers halving from 15,679 in the first half of 2024 to 7,485 this year. In contrast, Somerset defied the trend with a 167% surge in registrations, increasing from 603 to 1,612.
The South West fared best amid the slowdown, with only a 9% drop, while most regions endured double-digit declines. Overall, 201 local authorities reported fewer new firms, with only three recording an increase.
London maintained its status as the UK’s entrepreneurial hub, with 1,307 new businesses per 100,000 residents, the highest in the country for the fifth consecutive year. This achievement came despite a 25% decrease in the absolute number of registrations, from 152,439 in the first half of 2024 to 114,905 this year.
The North West rose to second place with 570 businesses per 100,000 people, outperforming the national average with only a 10% decline in total registrations. The West Midlands followed with 532 per 100,000, while Wales fell to fourth place and Scotland ranked lowest with 328 per 100,000.
Locally, Camden topped iwoca’s list again, recording 7,031 new businesses per 100,000 residents. Westminster was second with 5,084 per 100,000 and Islington third with 4,749. Cardiff was the only non-London authority in the top 10, ranking sixth, while Manchester placed 13th overall with 1,168 per 100,000.
Despite the overall downturn, iwoca’s CEO and co-founder Christoph Rieche emphasised Britain’s enduring entrepreneurial resilience. “Start-ups are the fresh organisms in our economic ecosystem, driving innovation, efficiency and future prosperity,” Rieche stated. “While new business registrations fell in 2025 due to stricter Companies House rules, it’s encouraging to see over 363,000 new firms still launched in the first half of the year. This clearly shows that Britain’s entrepreneurial spirit remains incredibly strong. We wish all these founders every success.”
You must be logged in to post a comment.