The demand for office space in major UK cities is on the rise, leading to increased competition for prime properties and increasing rental rates across the country. A limited supply of amenities-rich spaces in prime locations has caused rents in areas like the West End to skyrocket to £135 per square foot. Consequently, finding affordable offices is becoming more challenging for businesses.
How do the costs of UK office spaces in cities like London, Manchester, Birmingham, and Edinburgh compare? What options exist for companies seeking high-quality yet affordable workspaces to conduct business? This article provides an in-depth look at the key factors influencing office rental prices across the UK, along with average costs and how you can find affordable options.
What are Factors That Influence the Cost to Rent an Office in the UK?
The cost of UK office spaces is influenced by several key factors, including property tax, the state of the local economy, and the local job market. Seasonal variations also play a major role. During certain times of the year, demand for rental properties surges, leading to higher rental prices. Here are a few more factors that affect rental pricing:
Location of the Office Space
The cost of UK office space largely depends on location. Central locations in major cities are in high demand and short supply. Thus, their office space cost per square foot is higher and they command high rent prices. As you move away from the city centre towards the outskirts and neighbouring commuter towns, the rental prices generally decline. Within cities too, certain sought after neighbourhoods and business districts fetch higher rents.
Size of the Office
The size of the office space directly affects the monthly rent. Larger spaces typically cost more in total rent, while the overall cost will be lower for smaller spaces. So, before zeroing in on your office space, consider how much space you need for your current and future workforce to avoid unnecessary spending on unused areas.
Amenities Present in Office
To create an effective workplace, you require amenities such as high-speed internet, comfortable furniture, meeting rooms, and parking facilities. While opting for an unfurnished office may seem cheaper initially, the overall cost can skyrocket when adding these elements. However, in a furnished and up-and-running workspace, you can get all the amenities you require at a fraction of the cost.
Landlords often provide lower rent for long-term leases compared to short-term ones. However, committing to a longer lease can reduce flexibility. For instance, if you sign a 5-year lease but later need less space due to downsizing, you will be paying extra for unused space. Month-to-month agreements offer the most flexibility in such situations. Therefore, consider your growth plans and flexibility needs when deciding on your lease duration.
Fully Managed vs Commercial Office Space
When evaluating the cost of UK office spaces, two key options to consider are fully managed flexible offices and traditional commercial leases. Fully managed spaces provide everything needed, with the flexibility to make adjustments to the office space in accordance with your needs. Commercial leases generally require longer 3-5-year commitments, and entail additional furniture, utilities, and maintenance costs.
Know the difference: Coworking vs Private Office
Coworking spaces are designed as open-plan workspaces where desks are shared among different individuals and teams. On the other hand, private offices offer self-contained units for teams, providing them with their own private workspace. If you’re looking for a coworking space, desk rates usually start from £300-400 per month. However, if you prefer a private team office, the monthly rates can range from £800-1200.
What is the Average Cost of Office Space in the UK?
London remains the costliest city for office space rental, with rates ranging from £80 to £100 per square foot. In contrast, cities like Manchester, Birmingham, and Newcastle offer more affordable options within the specified ranges. Here is a more detailed comparison:
|Rental Cost Range (£/sq. ft)
Is There any Demand for Office Workspaces?
The COVID-19 pandemic caused a shift in the demand for different types of workspaces in the flexible office market. Flexible office spaces include coworking spaces, serviced offices, hot desks, private offices, and meeting rooms that are available for short-term or long-term rental.
Initially, during the pandemic, hot desks and open coworking spaces saw a dramatic drop in demand due to health concerns. However, post-pandemic, there is a continuing evolution in demand patterns.
According to the 2023 Global Coworking Survey, hot desks are making a comeback, with a 9% increase in uptake over the past 18 months. Moreover, as flexible work policies gain traction, the survey points to a considerable increase in demand for meeting rooms (7% growth) and team offices (7% growth) compared to 2021 figures. The ability to readily scale these team spaces motivates companies to seek these flexible solutions
In response to changing demands, coworking space providers have adjusted their layouts and amenities to align with the present-day workforce’s needs. There is now a focus on modular furniture, mobile partitions, and reconfigurable design elements, enabling companies to customise spaces according to each phase of their business.
Also read, 10 Effective Ways to Integrate Mindfulness into Your Rental Office Space
How do you Calculate the Cost of Office Space?
How much does it cost to rent office space in the UK? This question must have come in your mind while renting an office space. There are two main ways to estimate the cost:
Traditional Lease – Cost Per Square Foot
Total monthly rent = (Price per sq ft) x (Square footage)
For example, an office priced at £30 per sq ft with a 1,500 sq ft space would cost:
£30 x 1,500 sq ft = £45,000 annually = £3,750 monthly
You will also need to pay service charges, business rates, VAT, and other fees on top of the base rent.
Managed Space – Cost Per Person
Total monthly rent = (Price per person) x (Number of people)
If a coworking desk charges £300 per month per person, and you need space for five people, the monthly cost is:
£300 x 5 people = £1,500 + VAT
How to Find a Rented Office Space in Bermondsey, London?
Finding an affordable office rental space in the UK can be a challenge. Prime locations often come with premium price tags that can strain a company’s budget. Compromising on the environment or amenities can also lead to decreased productivity, creativity, and staff well-being over time.
Yet, there are a few neighbourhoods where you can find accessible and well-equipped workspaces without breaking the bank. Bermondsey is one such area, located near major business centres like the West End, Southwark, and key finance hubs such as the City and Canary Wharf.
You can also search local listing and see office spaces available in that area that suits your requirements
Pro tip: Go for a area where there are more business opportunities, such as Tanner st, SE1.
Bermondsey provides excellent connectivity with multiple tube stations nearby, making it convenient for employees to commute. It also offers lower rental prices compared to traditional central London business districts while still providing modern amenities.
Moreover, Bermondsey has a growing population of young professionals, giving companies access to a large talent pool. The area also has cafes, restaurants, and cultural spots that provide good meeting locations for those important meetings with clients. For any business seeking a well-connected UK office site, Bermondsey presents an extremely appealing option.
How Can GO Bermondsey Help?
For start-ups, entrepreneurs, and growing teams seeking to establish a hub in London that fosters inspiration, productivity, and meaningful connections, GO Bermondsey ticks all the boxes. Conveniently located near the London Bridge tube station, our thoughtfully designed workspaces optimise creativity, focus, and well-being. Whether you require private offices, dedicated desks, or meeting rooms, GO Bermondsey offers customisable workspace solutions to suit all your needs. Get in touch with GO Bermondsey today!