Britain’s entrepreneurial spirit remains strong, with 84 new companies launched every hour in the first half of 2025, according to fresh analysis from SME lender iwoca.
The annual Business Hotspots report, which draws on Companies House data, found that more than 363,000 businesses were registered between January and June 2025. However, this marked a 21% fall compared with the same period in 2024 — the first nationwide decline since iwoca began its index in 2021.
The drop follows reforms to Companies House rules in spring 2024, which increased registration requirements and fees to help tackle fraud and tax evasion. Persistently low SME confidence has also weighed on start-up activity.
Wales was the worst-hit region, with new registrations down 39% year-on-year. Cardiff experienced the sharpest fall of any local authority, halving from 15,679 in H1 2024 to 7,485 this year. By contrast, Somerset bucked the trend with a 167% increase in registrations, rising from 603 to 1,612.
The South West weathered the slowdown best, with just a 9% fall, while most regions saw double-digit declines. Overall, 201 local authorities recorded fewer new firms, with only three registering an increase.
London retained its crown as the UK’s entrepreneurial hub, with 1,307 new businesses created per 100,000 residents — the highest in the country for the fifth year running. That dominance came despite a 25% fall in the raw number of registrations, from 152,439 in H1 2024 to 114,905 this year.
The North West climbed to second place with 570 businesses per 100,000 people, outperforming the national average with only a 10% decline in total registrations. The West Midlands followed with 532 per 100,000, while Wales dropped to fourth place and Scotland slid to the bottom of the table with 328 per 100,000.
At the local level, Camden once again topped iwoca’s list, recording 7,031 new businesses per 100,000 residents. Westminster came second (5,084 per 100,000) and Islington third (4,749). Cardiff was the only non-London authority in the top 10, placing sixth, while Manchester ranked 13th overall with 1,168 per 100,000.
Despite the overall slowdown, iwoca’s CEO and co-founder Christoph Rieche insisted that the figures highlighted Britain’s enduring entrepreneurial resilience.
“Start-ups are the fresh organisms in our economic ecosystem, driving innovation, efficiency and future prosperity,” Rieche said. “While new business registrations fell in 2025 due to stricter Companies House rules, it’s encouraging to see over 363,000 new firms still launched in the first half of the year. This clearly shows that Britain’s entrepreneurial spirit remains incredibly strong. We wish all these founders every success.”