Are businesses more expensive to buy in London?

Usually, in absolute terms, because the businesses are larger and the property costs more. Whether the multiple is higher is a separate question and often it is not: a London leasehold business carries higher fixed costs and a shorter margin for error, and a buyer prices that. What reliably raises a London multiple is the same thing that raises it anywhere, which is earnings that do not depend on the owner.

What does a London lease do to the price?

More than almost anything else. Rent, business rates and service charge together are the largest fixed cost in most London businesses, and the unexpired term decides whether a buyer can invest. A short lease in London is a bigger problem than a short lease elsewhere, because the rent review on renewal is likely to be upward and the alternative premises are expensive.

Is the competition worse in London?

The business birth rate is the highest in the UK at 12.7 per cent, so yes, more new competitors arrive each year than anywhere else. The death rate is 10.3 per cent, which is around the middle. Read the pair together: London is churning faster in both directions rather than simply being harder.

Should I look outside London instead?

It depends on what you are buying for. The same profit usually costs less outside London and the fixed costs are lower, which is a real argument. What London has that most places do not is depth: more buyers when you come to sell, more staff to hire, and more customers to replace the ones you lose.

By location

Buying a business in London

London holds 1.042 million private sector businesses, more than any other UK region and around a fifth of the national total, and has the highest business birth rate in the country at 12.7 per cent. Both facts cut both ways for a buyer: more to choose from, and more competition for every customer the business you buy currently has.

9 min readUpdated 16 September 2026

London is the largest business market in the UK by a wide margin and the most churning. Both of those matter to a buyer, and they pull in opposite directions.

The numbers, and what they are and are not

1.042m

Private sector businesses in London at the start of 2025, the most of any UK region. London and the South East together hold 34 per cent of the UK business population.

Source: Department for Business and Trade, Business Population Estimates 2025

London also had the highest business birth rate in the UK in 2024 at 12.7 per cent, against a UK average of 11.1 per cent. Its death rate was 10.3 per cent, close to the middle of the pack.

Read those together rather than separately. A high birth rate is not simply good news for somebody buying an established business: it means more new competitors appear each year in whatever trade you are buying into. A buyer should treat it as a question about the business rather than a fact about the city. If the business you are looking at has held its customers through five years of that churn, that is evidence. If its revenue has drifted down over the same period, the market being busy is not the explanation you want.

These are regional figures. The ONS and DBT do not publish business demography at borough level, so anybody quoting you a precise Camden or Croydon number is inferring it.

What actually trades

The London market a private buyer sees is not the one the financial press covers. Below the mid-market, the businesses that change hands are:

Hospitality and food. The deepest and the most difficult. High turnover businesses, thin margins, leasehold almost without exception, heavy dependence on a specific site and frequently on a specific operator. Multiples sit at the bottom of the national range for good structural reasons rather than because London is unpopular.
Professional and B2B services. Agencies, consultancies, IT support, accountancy practices. The strongest London category for a buyer wanting transferable earnings, because more of the revenue can be contracted and the premises matter less.
Health and personal care. Dental and veterinary practices, clinics, care services. Barriers to entry are real, demand does not follow the cycle, and consolidators buy repeatedly.
Trades and property services. Maintenance, electrical, plumbing, cleaning. Often unglamorous, often profitable, and frequently owner-dependent in the way that decides the price.
Retail and convenience. Increasingly hard, and the ones that trade well are usually the ones with something a website cannot do.

The three things that decide a London deal

1. The lease, and it is not close

Rent, business rates and service charge together are the largest fixed cost in most London businesses, and they are the cost a buyer cannot negotiate down after completion.

Read the lease in full before anything else. The unexpired term decides whether you can invest in the business at all: four years of security does not justify a fit-out, and a buyer who cannot invest is buying a run-off. Check whether it is inside or outside the security of tenure provisions of the Landlord and Tenant Act 1954, because that determines whether you have a right to renew. Check the rent review pattern and when the next one falls. Check whether a change of control requires the landlord's consent, which many leases treat a share sale as triggering even though the tenant entity has not changed.

2. Staff, and what it costs to replace them

London wages are higher and so is turnover. For a business whose service depends on the people delivering it, the question is not what the payroll costs today but what it would cost to rebuild the team.

Ask who would be hardest to replace and what keeps them. Under TUPE the team transfers with their existing terms and their continuity of service, which is a constraint and also the reason the knowledge of how the business works does not walk out on completion day.

3. Whether the customers are the city's or the owner's

The London version of the concentration question. A business with two hundred customers within three miles is a different asset from one with six customers it won through the owner's personal network, even at identical profit. The first survives a change of ownership. The second is a relationship you are hoping transfers.

What a London seller should know

The same facts read the other way. Your buyer pool is deeper here than anywhere else in the country, which is genuinely worth something: more individual buyers, more trade acquirers, and more of the small consolidators that buy repeatedly in hospitality, dental and trades.

What that pool will test hardest is the lease and the owner dependence. Sorting the first means talking to your landlord before you go to market rather than during due diligence. Sorting the second takes about a year and moves the price more than anything you can do on the day. Our guide to how UK businesses are valued sets out why.

Where to look

Everything currently listed is searchable by sector and location with no registration. Most owner-managed businesses anywhere in the UK are sold confidentially, so a London listing will usually show a sector, a broad area and a size band rather than a name and an address. That is normal and our guide to confidentiality in a sale explains what is being protected and why.

If you want the process rather than the place, start with how to buy a business in the UK and the due diligence checklist.

Common questions

Are businesses more expensive to buy in London?: Usually, in absolute terms, because the businesses are larger and the property costs more. Whether the multiple is higher is a separate question and often it is not: a London leasehold business carries higher fixed costs and a shorter margin for error, and a buyer prices that. What reliably raises a London multiple is the same thing that raises it anywhere, which is earnings that do not depend on the owner.
What does a London lease do to the price?: More than almost anything else. Rent, business rates and service charge together are the largest fixed cost in most London businesses, and the unexpired term decides whether a buyer can invest. A short lease in London is a bigger problem than a short lease elsewhere, because the rent review on renewal is likely to be upward and the alternative premises are expensive.
Is the competition worse in London?: The business birth rate is the highest in the UK at 12.7 per cent, so yes, more new competitors arrive each year than anywhere else. The death rate is 10.3 per cent, which is around the middle. Read the pair together: London is churning faster in both directions rather than simply being harder.
Should I look outside London instead?: It depends on what you are buying for. The same profit usually costs less outside London and the fixed costs are lower, which is a real argument. What London has that most places do not is depth: more buyers when you come to sell, more staff to hire, and more customers to replace the ones you lose.

Sources

2025Business population estimates for the UK and regions 2025Department for Business and Trade
2025Business demography, UK: 2024Office for National Statistics
2026Find a business rates valuationValuation Office Agency