Soaring rents are hampering the growth of the tech sector, according to the founder of Central Working in research conducted by the London Tech Advocates.
“Spiralling rent costs and rigid contracts are hampering startup growth, we need a fundamental rethink of the way that office space is filled and used in London,” said James Layfield in the Joining The Dots report.
The majority of Tech London Advocate members surveyed for the report, 70%, said they are concerned their rent will increase significantly over the next three years, while 48% said they don’t think that office space can meet the needs of London’s tech community over the next five years.
A further 48% of the 240 respondents believe broadband speeds are damaging London’s reputation. Despite these infrastructure challenges, 65% of Advocates have never considered relocating their business.
The report also examines the opportunities for tech companies to address some of London’s biggest issues, with startups like Zipcar easing congestion. “We shouldn’t forget either that London needs to remain an attractive place to live if it is to continue bringing in the best business talent, and air quality is a big part of that,” said Mark Walker, UK general manager of Zipcar.
“Traditional service providers are continuing to build infrastructure that is not fit for purpose,” said Anthony Impey, founder of Optimity and Tech London Advocates infrastructure working group lead. “Across broadband and transport in particular, London urgently needs alternatives.”
Russ Shaw, founder of Tech London Advocates, added: “Building on top of an ageing infrastructure system cannot support our growing digital economy and London is in danger of facing a crisis of scale. Today we are making a number of recommendations into how the private sector can accelerate the improvements, construction and development the capital needs to become a Gigabyte City.”
The report outlines a number of key asks, including: a ‘landlords’ charter’ to help tech businesses find the best deals on commercial space; ‘developer dating’ between property investors, developers, landlords and startups; a standardised local authority planning process across London; a connectivity database.