Cardiff ranks as the UK’s leading hub for business growth in 2025, surpassing traditional economic powerhouses such as London and Manchester.  

New research conducted by private and commercial bank Arbuthnot Latham has revealed business density hotspots by analysing average population against companies registered in the last two years.

According to the newly launched Business Growth Index, Cardiff has the highest business density in the country, seeing one new business registered for every 10 residents.

The findings come as entrepreneurial activity surges across the UK, with nearly a million new businesses registered nationwide – a 34% increase from the previous year. 

While London continues to dominate in total business registrations, Cardiff’s business density highlights its growing appeal for entrepreneurs, the research suggests.

Over the past two years – January 2023-December 2024 – 35,943 businesses have been launched in the city, the second highest among the top 10, surpassed only by London. With an overall score of 99, the Welsh capital stands well ahead of its nearest competitor. 

Cardiff’s success can be attributed to several factors, says the bank. The city’s affordability, particularly in its property market, provides an accessible entry point for entrepreneurs, it says. High graduate retention from Cardiff University ensures a steady supply of skilled professionals, while the vibrant city centre and compact size foster close-knit networks and community ties that support new businesses. These factors combine to create an environment where entrepreneurship flourishes, it added.

Angela Niering-Wren and Chris Stevens are Senior Commercial Banking experts in Arbuthnot Latham’s Real Estate Finance and Specialist Trading teams.

Chris said:   

“In recent meetings, Cardiff has been highlighted as a potential target for property acquisition.

 

“The property costs in Cardiff are lower compared to Bristol and the Bath area, potentially leading to higher yields due to the lower entry costs. Several of my clients have expressed interest in House in Multiple Occupation (HMO) properties, considering Cardiff’s robust student market.” 

Angela said:

“Cardiff University has a strong retention rate of graduates who choose to stay after experiencing the city, creating a high-quality workforce. Its impressive research and development track record, and recent creation of Cardiff Innovation Campus, 17,500 square feet of office space, dedicated to bringing together thinkers and makers in a collaborative environment. Medical sciences, has also been a major driver of growth, with medical research companies siting their operations on the University Hospital of Wales campus Cardiff is attracting talent and innovation.”

When considering why Cardiff presents a compelling alternative to London as a business destination, Angela said:

“The city offers a lower cost of living while maintaining competitive salaries that stretch further in a regional setting. The area also benefits from proactive promotion by Cardiff Council, which actively attends trade events like MIPIM and UKREiif to highlight Cardiff’s advantages. As the seat of the Senedd, Cardiff provides businesses with closer access to key decision-makers, reinforcing its status as a dynamic and influential hub on the global stage.”