Outside of London and the South East, the North West of England has emerged as a leading destination for new businesses of all sizes.
A new report has revealed that the North West is rising through the ranks as a key UK region for entrepreneurs and start-ups, led by the cities of Manchester and Liverpool during 2024.
Over the course of the year, according to Funding Circle, 32,940 new businesses were registered in the region, with significant growth registered across the key industries of business administration and support services (17% annual growth), finance and insurance (5% annual growth) and accommodation and food services (3% annual growth).
While London remains the top location in the country with 66,920 new businesses registered in 2024, the growth seen in the North West points towards a shift in focus for entrepreneurs and business leaders.
The region’s growth also surpasses that of the neighbouring northern regions of Yorkshire and the Humber and the North East, which saw the opening of 21,960 and 8,745 new businesses respectively.
What’s driving growth in the North West
The report highlights the industries that have seen particularly strong expansion over the 12-month period, and looks at the reasons behind the increase in interest from new businesses.
The business and administration support services sector, which is also a dominant sector in London and the West Midlands, has seen a surge in demand for outsourced HR, IT and payroll services, as businesses “focus on core operations while reducing internal costs”, says the report.
Remote working patterns, automation and cloud software have also driven growth in this segment.
Finance and insurance is also becoming bigger business in the North West, led by Greater Manchester, according to Funding Circle, which is a “growing fintech hub”.
It adds: “Economic uncertainty and rising demand for loans, insurance, and investment products have fueled growth in the finance sector.”
The third sector experiencing strong growth in the North West (again led by Greater Manchester) is accommodation and food services, and this has been spurred on by a surge in domestic and international travel, which has boosted demand for hotels, restaurants and “unique hospitality experiences”.
The report notes: “The rise of food delivery services and online ordering is reshaping the sector, with businesses adapting to changing consumer lifestyles.”
Choosing right location is “crucial” for businesses
According to Funding Circle’s report, almost half (47%) of UK adults are thinking about starting a business or side hustle in 2025, which is 12% higher than this time last year. In total, more than 300,000 new businesses were launched in the UK.
With the North West emerging as the strongest business hub outside the south of England, with Manchester being particularly notable for its tech, media and finance industries, followed closely by Liverpool, it seems business leaders and startup owners are taking in the full UK picture when looking at a location for their business.
Jerome Fernandez at Funding Circle said: “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.”
If you’re looking for a property investment opportunity in the fast-growing North West of England, get in touch with BuyAssociation today to find out about our latest and upcoming opportunities.
