We’ve all heard about the soaring price of residential property in London, it has even become a source of amusement as tiny one-bedroom flats go for the same price as huge mansions elsewhere in the UK and abroad. A recent story about a man who discovered it was cheaper commuting from Barcelona than living in the capital prompted wry chuckles, not outrage.
However, there has also been less humorous media coverage. Looking at the issue of the lack of affordable-housing in London, Best Growth Stock recently provided an insight into whether some Londoners will have to adopt the “short-term occupation formula” presented by property guardianship. Perhaps less frequently discussed is the parallel situation occurring with office rental in the capital. London is now the most expensive city in the world for business space, exceeding Hong Kong and New York, with prices set to soar further due to increasingly high demand and limited space.
While this news is troubling for larger organisations, market intelligence from Leisure property experts Fleurets says the capital runs the risk of becoming overheated and over competitive for startups, entrepreneurs and SMEs.
Combine this with the fact that corporate giants such as Amazon and Omnicom are moving into the huge office spaces of the city and it’s easy to see how the knock-on effect results in smaller businesses and startups having to find new homes. So how can they hope to survive London’s soaring office prices?
By swapping a long term contract for a serviced office
While renting serviced offices may seem like a risky option, smart businesses can make use of the benefits that are associated with temporary office space. i2 Office have noted how a serviced office can be a valuable commodity during mergers and acquisitions. Serviced offices can provide your business with a central location that would otherwise be hugely expensive, without the long term commitment or contracts of permanent space,
Many of these companies provide users with meeting rooms, extra equipment such as landlines and naturally cover the cost of cleaning and maintaining the office space. New startups in particular can take advantage of paying a fixed monthly fee, avoiding the financial instability which often comes with the territory of supporting and equipping a growing business.
By seeking out the Shore ditch of the future
The companies that arguably benefitted most from the rapid growth of Shore ditch as a hub of tech startups and creative industries were the ones that were able to predict how the area would grow, purchasing property before prices rose. Changes in London transport links are predicted to make areas such as Ealing Broadway, Farringdon and Bond Street better connected. Therefore they will be much more popular for businesses, driving up residential and office property prices.
Just as regular property buyers are finding that taking a risk on a new area can pay-off in various ways, employers should not dismiss the idea of setting up shop outside traditional London business centers.
Locations south of the river are often far more affordable and just as easily accessible as more established business districts. Ad agency Iris has argued that in place of the ‘glass atriums’ of central London there is ‘a mentality of smart, entrepreneurial efficiency’ south of the river.
By embracing flexible work practices
The days of working in one fixed location from 9-5 may be over for good with 94% of UK organisations allowing some form of flexible working, moving the practice well into the mainstream. For businesses with limited space a viable alternative to moving location can be organizing a desk-sharing rota for staff to alternatively work from home and from the office.
This is one of the ‘smarter ways of working’ that is expected to save the UK government millions of pounds, and reduce the amount of unused desk space to an average of ten employees to every eight desks. Desk-sharing, co-working, hot-desking and working from home are not universally popular practices, but they are finally viable and practical alternatives to traditional office work, especially for small businesses and startups.
Finding suitable office space in London is only going to become more challenging for small businesses, but ideally this will inspire even more creativity and flexibility in the years to come.