Milton Keynes named most expensive business location outside of London

The 40 year old 'new town' of Milton Keynes has been named the most expensive place in the UK to run a small business outside London, in a report from Alliance and Leicester Commercial Bank.

According to Alliance and Leicester's Business Cost Monitor (BCM), the popular commuter town of Milton Keynes, less than 50 miles from London, is the most costly place to run a small business in the country.

The town scores particularly highly on rental values, transport prices and labour costs.

The Top Ten most expensive locations for businesses outside London are: Milton Keynes.

Cambridge.

Oxford.

Guildford.

Edinburgh.

Chelmsford.

Reading.

Stevenage.

Bristol.

Manchester.

The Business Cost Monitor compares the operating costs for small to medium sized enterprises (SMEs) in towns and cities across the UK, excluding Greater London.

It scores each area according to the financial issues that impact on local small businesses; from labour costs, business rates and rental values to housing costs and quality of life.

Milton Keynes is the most expensive town to rent retail property space, with average annual costs of £2,500 per square metre.

The desirability of this growing town means that the cost of living and house prices are also high for both business owners and staff.

In addition, Milton Keynes is ranked eighth in the country for average weekly pay.

Here business owners face hefty wage bills, with employees earning around £517 a week, compared to the national average of £457.

Following closely, in second and third place, are the university cities of Cambridge and Oxford, which not only score highly for both office and industrial rental space but are hard hit by the cost of living and housing in the area.

In fact, Oxford has the second most expensive house prices in the UK after the South East and London.

The bustling town of Guildford in Surrey is in fourth place, with a combination of living costs and high office rentals seeing it rise up the rankings.

Another blow for small businesses in this area is wages, with Guildford scoring higher than any other town or city in the top ten for average earnings.

The popular tourist destination of Edinburgh follows in fifth place.

Despite relatively low transport costs and few businesses worrying about the cost of living, it is high labour costs and rental values for both retail and industrial properties that push it into the top five.

More than a third (35%) of SMEs across the UK identified labour costs as their biggest financial concern, with a quarter (27%) naming business rates, almost a fifth (19%) identifying rental costs for premises or equipment and nearly one in ten (9%) citing transport costs as having the biggest impact.

When it comes to the secondary costs associated with running a business, almost three in ten (29%) feel the cost of living has the greatest impact on them, while almost two in ten (17%) find the cost of housing in the area, for both themselves and their staff, the greatest burden.

The cost of recruitment, childcare and crime all rank much lower.

Other factors were then researched, with many business owners reporting that high quality of life, a good choice of professional services and parking issues, had a financial impact on their business.

By contrast, they feel that issues such as tourism, local school rankings, and the number of new businesses starting up nearby, have little or no effect on them.

Steve Jennings, Director of Business Banking at Alliance and Leicester Commercial Bank, said: "It's important that SMEs understand all the costs that can affect their business.

Our research shows that, despite its property prices and salaries being among the highest in the UK, the South East isn't always the most expensive place to run a business, in fact there are hotspots all over the country.

"The Top Ten locations all have thriving, successful business communities, which means SMEs must expect to pay a premium.

In fact Milton Keynes, our number one, has a target to double its population by 2025, which will provide huge opportunities for businesses in the area.

"However, businesses that face high costs due to the area they're in can save money in other ways.

Reviewing outgoings is just one area where businesses can save considerable amounts of money.

Look at regular costs such as utilities and bank charges and ensure you shop around for the most competitive deals.

By researching the deals available and switching to a more competitive offer, businesses can save thousands of pounds each year." In order to make it easier for businesses to evaluate the deals available and ensure they find the best value account Alliance and; Leicester Commercial Bank has launched www.interest-challenge.co.uk .

For further information on the full range of accounts available from Alliance and; Leicester Commercial Bank, business owners should call free 0800 587 0800 or visit www.alliance-leicestercommercialbank.co.uk.

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