Business comparison experts Bionic analysed thousands of retail, hospitality and office spaces across the UK using data from property listing sites Rightmove and PropertyPal to assess which areas were most expensive for different types of businesses.
Prices were collected per property, and monthly mortgage repayment estimates were based on 75% interest-only loans, with 5% interest rates, spread over 15 year repayment periods.
The average price of purchasing a commercial property in London is over £1.6m, double the UK average. This means mortgage repayments would cost £5,099.72 pcm, based on 15 year repayment periods and 5% interest rates.
In 2022, the base interest rate sat at around 2% and the average commercial mortgage repayment in London was £2,040. This means the average monthly commercial mortgage repayment has risen by over £3,000.
However, renting retail, hospitality and office spaces in the Capital costs businesses on average £11,412 pcm, which is more than double that of mortgage repayments and three times more expensive than the UK average rental prices.
Office spaces were by far the most expensive type of property for businesses to purchase or rent. Office space mortgages cost £6,887pcm to repay, while it would cost £11,936 pcm to rent an office space.
Hospitality space mortgages cost £5,813pcm to repay, while it would cost £4,313 to rent a hospitality space on average.
Retail space mortgages cost businesses £2,541pcm to repay, while renting a retail space would be almost triple the price at £6,072pcm.
Les Roberts, Business Comparison expert at Bionic, has provided advice to small businesses that might have hesitations about purchasing a commercial space.
Roberts said, “It’s clear to see from this data that commercial rent prices are continuing to rise. Being tied to a lease is especially risky during economically volatile conditions as many leases increase in line with inflation, which currently sits around 8.7%. Not only does buying give you full control over the property, but it means costs can be fixed, removing the risk of payments increasing,
More and more post-pandemic business leaders are considering full-time remote working to impact employee productivity, and ONS data shows that UK productivity losses cost businesses around £43.59 an hour. Investing in an office space and adopting either full-time or hybrid working conditions could boost employee productivity and your profits.”
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