In a resilient display of resilience despite significant economic challenges, the UK welcomed over 363,000 new businesses in the first half of 2025, according to an analysis by SME lender iwoca of Companies House data.
That’s the equivalent of 84 fresh enterprises springing to life every hour across Britain from January to June—which seems to be a testament to the commitment of entrepreneurs, even as registrations dipped nationwide for the first time since tracking began in 2021.
Christoph Rieche, CEO and Co-Founder of iwoca, said:
“Startups are the fresh organisms in our economic ecosystem, driving innovation, efficiency, and future prosperity. 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.”
The overall 21% decline from H1 2024—when 460,000 businesses were registered—can largely be pinned on administrative hurdles introduced in Spring 2024.
New Companies House fees and enhanced verification requirements have slowed the incorporation process, dampening what was previously a record-breaking boom.
Yet, low SME confidence, fueled by lingering inflation and geopolitical tensions, also plays a role.
Despite these barriers, the hourly birth rate of companies highlights a core truth: barriers deter the timid, but the bold press on.
Regionally, the landscape reveals contrasts.
London retained its crown as the UK’s top business creation hub for the fifth straight year, boasting 1,307 new registrations per 100,000 residents.
However, even the capital felt the pinch, with absolute numbers tumbling 25% from 152,439 to 114,905.
This per capita dominance speaks to the city’s magnetic pull—its access to talent, funding, and networks remains unmatched, drawing dreamers from across the globe.
The North West climbed the ranks, securing second place with 570 businesses per 100,000 people, up from fourth in 2024, despite a modest 10% drop to 42,257 registrations.
Wales, however, bore the brunt of the slowdown, suffering a 39% plunge to 15,053 new firms and landing fourth at 484 per 100,000.
Scotland trailed with the lowest rate at 328 per 100,000, while the North East clocked in at 336.
The South West, by contrast, weathered the storm best, with just a 9% dip to 19,030.Drilling down to local authorities paints an even sharper picture.
Camden in London topped the charts again, registering 7,031 businesses per 100,000 residents—though its total fell 40% to 14,774.
Westminster and Islington followed closely at 5,084 and 4,749 per 100,000, respectively, forming a London trio that dominates the top 10.
Cardiff broke the monopoly in sixth place with 2,066 per 100,000, but it endured the steepest local decline: a 52% nosedive from 15,679 to 7,485.
Manchester held steady at 13th with 1,168 per 100,000.
Nationwide, the trend was somewhat sobering: registrations dropped in 201 of Britain’s 201 unitary authorities, rising in only three.
Somerset bucked the downturn dramatically, surging 167% from 603 to 1,612 new businesses—perhaps a ripple from rural revival initiatives or post-pandemic shifts to remote work.
Such outliers hint at pockets of optimism, where local incentives or sector-specific booms are fueling growth.
What does this mean for the UK‘s economic future? On one hand, the 21% contraction signals caution—fewer startups could mean slower job creation and innovation pipelines.
SMEs, which employ 16.7 million people and contribute £2.4 trillion to GDP, are the economy’s lifeblood; any challenges or issues here reverberate.
On the other, the sheer volume—363,000 ventures—affirms resilience.
These aren’t just numbers or statistics; they’re founders focused on various ideas in hospitality, tech, green energy, and beyond, injecting competition and creativity.
iwoca’s analysis and insights arrive at a seemingly pivotal moment.
With interest rates stabilizing and government pledges for deregulation, H2 2025 could potentially rebound.