The Best UK Regions for New Business Formation: A Data Analysis
London leads the latest complete annual ONS data on new-business formation, recording both the highest number of business births and the highest regional birth rate in 2024. Around 76,000 businesses were born in London during the year, equivalent to a birth rate of 12.7%, compared with 11.1% across the UK.
But the region with the highest rate of new-business formation is not automatically the best place for a business to survive or grow. Audit Consulting Group’s analysis of Office for National Statistics data finds a much more nuanced regional picture: the South West leads on five-year survival, London leads on high-growth businesses, and Northern Ireland recorded the lowest business death rate in 2024.
This analysis compares the nine English regions, Scotland, Wales and Northern Ireland using official business birth, death, survival and high-growth data, alongside Department for Business and Trade estimates of the wider private-sector business population.
UK regional business formation: key findings
- London had the UK’s highest business birth rate in 2024 at 12.7%, against a national rate of 11.1%.
- Around 76,000 businesses were born in London, representing approximately 24% of all UK business births based on rounded ONS regional counts.
- The North West ranked second for business birth rate at 11.9%, while the North East and West Midlands each recorded 11.8%.
- Every UK region and nation recorded a higher business birth rate than death rate in 2024.
- London had the widest birth-minus-death rate gap at 2.4 percentage points, according to Audit Consulting Group calculations.
- The South West recorded the highest five-year survival rate at 43.5% for businesses born in 2019 and still active in 2024.
- London had the highest high-growth business rate at 6.6% among businesses with at least 10 employees, compared with 4.9% across the UK.
- London also had the highest wider private-sector business density, estimated at 1,436 businesses per 10,000 adults at the start of 2025.
Which UK regions have the highest new-business formation rates?
The Office for National Statistics recorded approximately 317,000 business births across the UK in 2024. Against an active enterprise population of approximately 2.86 million, this produced a national business birth rate of 11.1%.
London was clearly ahead on both measures. Approximately 76,000 businesses were born in the capital, while its 12.7% birth rate was 1.6 percentage points above the UK average.
| Region / nation | Active businesses (‘000) | Business births (‘000) | Birth rate | Business deaths (‘000) | Death rate | Birth-minus-death rate gap |
|---|---|---|---|---|---|---|
| London | 595 | 76 | 12.7% | 61 | 10.3% | +2.4pp |
| North West | 284 | 34 | 11.9% | 30 | 10.5% | +1.4pp |
| North East | 77 | 9 | 11.8% | 8 | 10.3% | +1.5pp |
| West Midlands | 229 | 27 | 11.8% | 24 | 10.6% | +1.2pp |
| Yorkshire and The Humber | 200 | 23 | 11.3% | 20 | 10.2% | +1.1pp |
| Scotland | 172 | 18 | 10.7% | 16 | 9.4% | +1.3pp |
| East Midlands | 188 | 20 | 10.6% | 19 | 10.3% | +0.3pp |
| East of England | 286 | 30 | 10.4% | 27 | 9.3% | +1.1pp |
| South East | 431 | 43 | 10.0% | 39 | 9.1% | +0.9pp |
| Wales | 100 | 10 | 10.1% | 10 | 9.6% | +0.5pp |
| Northern Ireland | 66 | 6 | 9.5% | 5 | 7.3% | +2.2pp |
| South West | 233 | 22 | 9.6% | 21 | 9.1% | +0.5pp |
| UK | 2,860 | 317 | 11.1% | 280 | 9.8% | +1.3pp |
Source: Office for National Statistics, Business Demography, UK: 2024. Counts are rounded by ONS to the nearest thousand. Birth-minus-death rate gaps are Audit Consulting Group calculations from published ONS rates. 2024 death counts are provisional.
The table shows why raw numbers alone are not enough for a regional comparison. The South East recorded around 43,000 births, substantially more than the North East’s 9,000, but the North East had a higher birth rate relative to its existing active business population: 11.8% compared with 10.0%.
For that reason, the birth rate is particularly useful when comparing differently sized regional economies.
London accounted for around one in four UK business births
London’s scale is significant as well as its formation rate. Using the rounded ONS regional counts, Audit Consulting Group calculates that London’s approximately 76,000 births represented around 24% of the UK’s 317,000 business births in 2024.
ONS data also show that professional, scientific and technical activities were the largest contributor to business births in London, accounting for 17.7% of births in the capital. Management consultancy businesses represented almost half of that increase within the industry.
The result is therefore not simply a consequence of London having a larger existing business base. London led both the absolute birth count and the birth rate.
Business births exceeded deaths in every UK region and nation
One of the clearest findings from the 2024 regional data is that every region and nation recorded a business birth rate above its death rate.
Across the UK, the birth rate was 11.1% and the death rate was 9.8%, a gap of 1.3 percentage points. London recorded the widest gap at 2.4 percentage points, while Northern Ireland followed at 2.2 percentage points.
This comparison should not be interpreted as a direct measure of regional economic growth. Business births and deaths are enterprise-demography measures, and 2024 death figures remain provisional. It does, however, provide a useful view of the balance between entries and exits within each regional business population.
Northern Ireland had the lowest business death rate
Northern Ireland presents a useful contrast to London. Its 9.5% business birth rate was the lowest among the UK regions and nations in 2024, but its 7.3% death rate was also the lowest.
That produced a positive birth-minus-death rate gap of 2.2 percentage points — only slightly below London’s 2.4 percentage-point gap.
This illustrates why a low formation rate does not necessarily imply weak business demography. Regions can arrive at a relatively favourable balance between births and deaths through very different combinations of entry and exit rates.
The South West leads on five-year business survival
The picture changes substantially when the analysis moves from formation to survival.
ONS five-year survival data measure the proportion of businesses born in 2019 that remained active in 2024. On this measure, the South West recorded the UK’s highest five-year survival rate at 43.5%, compared with 38.4% nationally.
The West Midlands recorded the lowest rate at 30.6%.
| Area | Five-year survival rate | Difference from UK rate |
|---|---|---|
| South West | 43.5% | +5.1pp |
| UK | 38.4% | — |
| West Midlands | 30.6% | −7.8pp |
Source: Office for National Statistics, Business Demography, UK: 2024. Differences from the UK rate are Audit Consulting Group calculations.
The contrast is notable because the South West recorded a business birth rate of only 9.6% in 2024, the second-lowest among the areas analysed. The West Midlands, by comparison, had one of the highest birth rates at 11.8%.
These figures concern different cohorts and should not be interpreted as evidence that a higher current formation rate causes lower survival. They instead show why formation and survival need to be treated as separate dimensions of regional business activity.
The West Midlands shows why registrations need context
The West Midlands provides one of the clearest examples of why a single formation metric can be misleading.
Its 11.8% business birth rate placed it among the leading UK regions in 2024, while its five-year survival rate for the 2019 cohort was the lowest at 30.6%.
ONS has also highlighted the effect that multiple business registrations at a single postcode can have on business-demography statistics. Virtual offices, management companies, personal service companies and other concentrations of registrations can influence recorded births, deaths and survival rates in particular areas.
Regional formation statistics should therefore be interpreted as measures of registered enterprise activity rather than as direct measures of entrepreneurial quality or the probability that an individual new business will succeed.
London also leads for high-growth businesses
London’s advantage is not limited to business births.
ONS defines a high-growth business as an enterprise with at least 10 employees that achieves average annual employment growth of more than 20% over a three-year period.
In 2024, London had 3,540 high-growth businesses among 53,620 active businesses meeting the employment threshold, giving it a high-growth rate of 6.6%. The UK rate was 4.9%.
Audit Consulting Group calculates that London’s high-growth rate was therefore 1.7 percentage points above the national rate.
Northern Ireland recorded the lowest regional high-growth rate at 3.5%.
This measure has an important denominator: it applies only to businesses with at least 10 employees. It should not be interpreted as the proportion of all businesses that are high-growth businesses.
Business density tells another part of the regional story
The ONS Business Demography dataset covers registered enterprises on the Inter-Departmental Business Register. A different government dataset provides a broader view of the private-sector business population.
According to the Department for Business and Trade’s Business Population Estimates 2025, London had approximately 1.042 million private-sector businesses at the start of 2025.
London also recorded the highest estimated business density, with 1,436 private-sector businesses per 10,000 adults. The South West followed at 1,163, the South East at 1,135 and the East of England at 1,102.
These figures should not be substituted for ONS business birth rates. DBT’s estimates cover a broader business population, including estimated unregistered businesses, whereas ONS Business Demography is based on enterprises on the IDBR.
What does “best UK region for new business” actually mean?
There is no single official measure of the “best” UK region for starting a business. Different indicators answer different questions.
| Measure | Leading area | Result | What the measure indicates |
|---|---|---|---|
| Business birth rate, 2024 | London | 12.7% | New enterprises relative to active enterprise population |
| Number of business births, 2024 | London | Approx. 76,000 | Absolute scale of new registered enterprise activity |
| Birth-minus-death rate gap, 2024 | London | +2.4pp | Difference between regional birth and death rates |
| Lowest business death rate, 2024 | Northern Ireland | 7.3% | Lowest rate of enterprise deaths |
| Five-year survival | South West | 43.5% | Share of 2019 births still active in 2024 |
| High-growth rate, 2024 | London | 6.6% | High-growth enterprises among businesses with 10+ employees |
| Private-sector business density, start of 2025 | London | 1,436 per 10,000 adults | Estimated wider private-sector business concentration |
Sources: Office for National Statistics Business Demography, UK: 2024; Department for Business and Trade Business Population Estimates 2025. The birth-minus-death rate gap is an Audit Consulting Group calculation.
For someone researching the UK company formation process, this distinction matters. A high regional birth rate describes the intensity of new enterprise creation; it does not establish that businesses formed there face lower costs, better financing conditions or a higher probability of survival.
Business births are not the same as company incorporations
Business formation statistics can refer to several different measures that should not be treated as interchangeable.
ONS business births are new enterprise entries on the Inter-Departmental Business Register. Companies House incorporation data, by contrast, record the legal creation of companies. Not every incorporated company represents a newly active business, and not every business is structured as a limited company.
DBT Business Population Estimates use another definition again, estimating the broader private-sector business population and including businesses that are not registered for VAT or PAYE.
For readers considering different business structures, Audit Consulting Group’s resources for sole traders and small businesses provide further context on how business structure and reporting obligations differ.
Are more recent 2026 business formation statistics available?
Yes, but they should not be substituted directly into this regional annual comparison.
ONS published quarterly Business Demography statistics for April to June 2026 on 30 July 2026. They recorded 79,325 UK business creations and 76,840 business closures during the quarter.
However, ONS states that its quarterly series is not fully consistent with the annual Business Demography publication. The annual series is published later to allow for business reactivations and remains the preferred measure of business demography.
For this reason, this article uses the 2024 annual dataset for comparable regional birth, death, survival and high-growth analysis, while treating the Q2 2026 release as a more timely indicator rather than a replacement dataset.
Methodology
This analysis was prepared by Audit Consulting Group using official UK government data checked up to 24 September 2026.
The principal source is the Office for National Statistics Business Demography, UK: 2024 publication, based on the Inter-Departmental Business Register. It provides comparable annual regional data for business births, deaths, survival and high-growth businesses.
The analysis covers the nine English regions, Scotland, Wales and Northern Ireland. ONS counts in the regional birth-and-death table are rounded to the nearest thousand, so calculations based on those counts are approximate.
Audit Consulting Group calculated birth-minus-death rate gaps by subtracting each area’s published death rate from its birth rate. London’s approximate share of UK births was calculated from the rounded ONS counts of 76,000 London births and 317,000 UK births.
Five-year survival figures refer to enterprises born in 2019 that remained active in 2024. They should not be compared causally with 2024 formation rates because the measures refer to different cohorts.
High-growth statistics cover businesses with at least 10 employees and therefore do not describe the full business population.
The Department for Business and Trade’s Business Population Estimates 2025 are used separately for wider private-sector business population and density. Those estimates include businesses outside the ONS registered-business population and are not treated as equivalent to Business Demography figures.
More recent quarterly ONS data are available through Q2 2026. They provide a timelier indicator but are not fully consistent with the annual Business Demography series, which ONS identifies as its preferred measure.
Important limitations
The latest complete annual regional Business Demography data relate to 2024 rather than 2026 because annual business-demography statistics require time for later information and business reactivations to be incorporated.
ONS identifies the 2024 business death figures as provisional. They may therefore be revised in later releases.
Multiple registrations at individual addresses can affect local and regional business-demography statistics. Formation rates should not be interpreted as direct measures of business quality, entrepreneurial success or the attractiveness of a region for every type of business.
Regional averages also conceal substantial differences between cities, local authorities and industries. The “best” location for an individual business may depend on its sector, customers, workforce, supply chain, premises requirements and other factors that are not measured by business birth rates.
Which region leads?
If new-business formation itself is the measure, London leads the latest complete annual ONS data: it recorded the UK’s highest business birth rate at 12.7% and approximately 76,000 births in 2024.
But the broader data produce different leaders. The South West recorded the highest five-year survival rate, Northern Ireland the lowest 2024 death rate, and London the highest high-growth rate and wider private-sector business density.
The most defensible conclusion is therefore not that one region is universally best. It is that regional business performance changes materially depending on what is being measured — and formation, survival and growth describe different stages of the business lifecycle.