Emerging UK Business Hotspots in 2024: Discover the Best Cities and High-Growth Sectors for Start-Ups and Entrepreneurs

With the growing number of new businesses nationwide, competition is intense. That’s why selecting the right location is vital for success. Funding Circle has identified the UK’s top emerging business hotspots—ideal for start-ups and SMEs ready to scale.

When starting a business in the UK, London remains the leader with 66,920 new business registrations in 2024. But emerging cities like Brighton, Oxford, Manchester, and Liverpool are proving to be thriving entrepreneurial hubs packed with potential.

Regional Business Hotspots

Tracking the number of VAT and/or PAYE-based enterprises gives a great picture of what the business landscape looks like in the UK. The UK business landscape is mostly made up of companies that are in the following sectors: professional, scientific & technical services (3 million businesses), construction (2.5 million businesses), and business administration & support services (1.5 million businesses). 

New business growth across UK regions in 2024

Out of all countries in the UK, England saw the biggest number of new businesses set up in 2024, seeing 267,005 newly registered businesses. While London leads the way with the highest number of business registrations in 2024 at 66,920, the data sees strong growth in the South East and North West.

The South East (41,385 new businesses) holds strong as the second-best performer, benefiting from London’s economic spillover, lower operating costs, and business-friendly environments in cities like Brighton and Oxford. While it doesn’t rival London in volume, the South East presents a strong alternative for startups and businesses looking for accessibility without the capital’s overheads.

The North West (32,940 new businesses) is the strongest business hub outside the South, particularly in Manchester, where tech, media, and finance industries continue to grow. It outperformed Yorkshire and The Humber (21,960) and the North East (8,745) significantly, reinforcing Manchester and Liverpool’s status as key startup locations in the north.

However, the North East struggles the most, registering the second-lowest total in the country. This suggests a need for more investment in business infrastructure and incentives to encourage entrepreneurship in cities like Newcastle and Sunderland.

Growing sectors for new businesses in the UK

Although some sectors dominate the UK market, year-on-year growth in specific industries highlights key business trends and evolving consumer demand. Top growth sectors are:

• Business administration and support services (17% growth YOY in new businesses) – London, Greater Manchester, West Midlands

In 2024, we have seen a growing demand for business administration and support services. This is due to the need for non-core departments such as HR, IT and Payroll, allowing businesses to focus on their core offering while reducing internal costs. Alongside this, the growth in flexible working, tech advancements such as cloud software and automation, and the need for scalable business solutions make these services more important than ever. As companies expand, the demand for further administrative support is essential as locations increase; all these factors drive growth in this sector.

• Finance and insurance (5% growth YOY in new businesses) – London, Westminster, Greater Manchester

A changing economy and financial pressures have led to rising consumer and business needs for loans, insurance, and investment products in 2024, leading to business opportunities within the finance and insurance sectors. As fintech sees further technological advancements, such as digital payments, make it more accessible and efficient for both consumers and businesses. Additionally, the changing regulatory landscape has created more opportunities for startups and SMEs to offer tailored products and services. Factors such as the increasing risk of cybercrime and climate change have also seen a growing need for insurance services. These factors make finance and insurance an attractive sector for new businesses seeking to capitalise on these emerging trends.

• Accommodation and food services (3% growth YOY in new businesses) – London, Greater Manchester, West Midlands

In 2024, the accommodation and food services sector continues to grow, with new business growth up 3% year-on-year. As domestic and international travel rises, so does consumer demand for hotels, restaurants, and unique hospitality experiences. The post-pandemic sees reignited consumer interest in dining out and travel, while the growing popularity of delivery services and online food ordering reflects a shift toward convenience-driven lifestyles. This changing landscape presents exciting opportunities for businesses to cater to changing consumer habits and preferences.

Why is the UK a popular place to start a business? 

Competitive tax environment: The UK offers competitive corporate tax rates, which can be attractive for new businesses looking to minimise their tax burden.

Access to funding: The UK has a robust venture capital ecosystem, providing startups and SMEs with opportunities to secure early-stage funding and access to business finance.

Skilled workforce: The UK is home to a highly educated and skilled workforce across a wide range of industries, making it an attractive destination for businesses looking to scale and innovate.

Global access: London, as the UK’s leading financial hub, provides businesses with direct access to global markets and a vast network of international clients. Alongside this, other UK cities are also emerging as key players in the global economy, with cities like Manchester, Birmingham, and Edinburgh having strong financial and business sectors, offering growing opportunities for trade and investment.

Jerome Fernandez at Funding Circle comments, “The growth of new businesses is essential to strengthening the UK economy, and providing entrepreneurs with access to finance is key to turning their vision into reality. Despite recent challenges, data suggests a positive outlook, with ONS business insights revealing that 22% of trading businesses expect their turnover to rise by March 2025, and 20% anticipate overall performance growth within the next year. The data underscores the resilience of UK entrepreneurs, the shifting regional business dynamics, and the continued importance of financial support and policy initiatives to sustain and encourage business growth in the years ahead.

When starting a business, choosing the right location is crucial for success. It’s important to consider the services you offer, how they fit within the local market, and the level of competition in the area to ensure your business can thrive. While concerns over taxation and rising costs persist, a business credit card can offer a flexible financial safety net, helping entrepreneurs to hit the ground running, manage cash flow, and keep their businesses running smoothly.”