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Top reasons why businesses are moving to the north


The development of the Northern Powerhouse has seen many businesses relocate their operations to the north. But what other reasons are behind this movement?

In recent years, the capital has seen a number of its prime businesses open major offices in the north. The BBC, HSBC, Freshfields Bruckhaus Deringer and KMPG, to name only a few, have all opened offices in cities like Manchester, Leeds and Birmingham, plus the recent announcement that the Royal College of Physicians will be committing to Liverpool’s Knowledge Quarter shows the trend is continuing.

One main area of growth is within the digital economy, where former Department for Business, Innovation and Skills Minister Ed Vaizey says over 70 per cent of its businesses are located outside of London.

With business comes revenue, and as companies increasingly choose to invest their funds in the north, cities in the Northern Powerhouse have gone from strength to strength.

But what is the motivation for businesses to do this? Of course, the soaring cost of renting in London is likely to be contributing to the north's growing economy, but it is rare for a company to move to the other end of the country just to avoid high cost of living. We’ve delved deeper into the reasons why businesses are setting up in the north.

A learning hub

Business to one side, many cities in the north have an excellent selection of universities bringing in thousands of students every year. Leeds is home to three high-performing universities, and this year the University of Leeds won University of the Year in The Times and The Sunday Times Good University Guide, registering over 32,000 students from 147 countries.

According to Simon Brereton, head of economic policy and sector development at Leeds City Council “three-quarters of graduates from Leeds Beckett stay in Leeds….[and] typically a third of Leeds University graduates get a job and stay locally.”

One of the most obvious benefits for graduates staying in northern cities such as Leeds is the relatively lower cost of living, but as more and more businesses move operations north, the number of opportunities for graduates is also rising.

In turn, the high retention of graduates in northern cities gives firms a wide talent pool of graduates to choose from when hiring new staff. Businesses now know that they can still attract top talent, without needing to have a London base.

City Talent

The Northern Powerhouse has seen a swell in talent as the number of businesses operating in its cities grows. Not only is cheaper rent in comparison to London a major selling factor but the value of working in these cities among other thriving businesses is also attractive.

The recent infrastructure improvements in northern cities like Manchester and the level of innovation being shown by developers are more great reasons why businesses are relocating to the city. Recently, Manchester won the CityVerve accolade, allowing it to become the UK’s first city to try out the technological capabilities of the Internet of Things (IoT), with the government investing £10 million in city tech improvements.

Another appeal of the city is improved transport links available across the region. Last year, Greater Manchester Combined Authority (GMCA) spent over £280m on transport. This investment helped to make significant progress on the Metrolink, open more cycle hubs and improve pedestrian and cycle links across the city.

It’s the dramatic change in Manchester’s economic strength that means it is being positioned as a global digital leader, according to Manchester’s council chief executive.

Start-up culture

Liverpool has been named as the second fastest growing cluster in the digital technology industry and is particularly known for its strong games development.

The city is home to a number of start-up companies that feature prominently in the narrative of the state of Britain's digital economy, as portrayed in a report by Tech City UK. This government-backed initiative aims to promote the growth of digital start-ups around the UK, rather than in London’s Shoreditch and other areas surrounding the capital.

According to a report by Tech Nation, in terms of the growth of newly formed digital companies, Liverpool stands ahead of central London, with a 119 per cent rate growth rate compared 92 per cent respectively. This means that the city’s digital industries have a very good chance of growing faster and generating higher salaries than in much of the rest of the UK.

The high number of coworking and incubator spaces available in northern cities provide start-ups the opportunity to grow and develop their business, while benefitting from support within their like-minded community.

Are you looking to start-up your business in an office that suits your needs? Find the very best by visiting our locations.

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