Finding the right property for your new London business
Tired of your 9-to-5 position and the boring chat you keep getting from your colleagues at lunch break?
Increasingly, more highly qualified workers in London are quitting exec office life to launch their own ventures. This is a solution that comes with its pros and cons, so you need to make sure you know exactly what you’re going to deal with.
If you have already made up your mind, read on and start off on the right foot with your London business by choosing the ideal property.
Rent or mortgage?
This is a common question when you’re about to move house, yet it will likely haunt you even more in the months and weeks prior to choosing your future headquarters.
Is it worth starting a mortgage for your future shop or office or is it more sensible to pay rent? Always bear in mind that mortgages for commercial properties come with more risks than those for residential properties.
Given booming property prices, renting a shop in London is a common occurrence, whereas fewer shopkeepers will be confident enough to start a mortgage before even knowing if the business will be successful or not.
As a rule of thumb you should start off with a rent, and then if the conditions are favourable enough within a year from launch, buying works better for the long run and will save you a decent amount of money. This is mostly because the interest of commercial mortgage repayments is tax-deductible, but also because, unlike with rents, the monthly payments won’t increase over time.
How to choose the right area?
Sure, up-and-coming parts of town are very inspiring, but only up to the moment when they actually become too hip – and expensive – for starting a new business.
Ten years ago was probably a great time to start off in Shoreditch, but that’s no longer the case. Vacancies are again very low in central London, so previously more accessible areas such as Farringdon and the South Bank are fast becoming overcrowded.
Ideally, you want something convenient, visible, but also affordable. North London is currently where most micro-businesses can be found in the capital, a symptom of the fact that the price and location are quite convenient. With a great mix of urban and greener areas, working in North London can be overall less stressful than commuting daily to more central parts.
If you’re operating in the tech sector, you might want to look around in South London, with Croydon currently being the fastest-growing tech cluster in the UK. Elsewhere, West London is better suited for starting a shop given the high penetration of shopping areas and affluent population. Media agencies are also thriving in this area, which has been chosen by a number of major names in the industry because of its proximity to Heathrow and fast links to central London.
Where’s your choice of location in London for running a business? How about co-working opportunities if you’re someone who tends to work from home? Let us know your thoughts below!