Why London’s Finance Sector is Moving East – to Essex…

London is a world-leading finance hub and home to a highly developed cluster of finance businesses and supporting talent. But with prime office rents now averaging £67 per square foot in the City [1], the advantages of locating finance operations in London come at a high price.

The London-Essex UK Finance Corridor  

The London-Essex UK Finance Corridor

So is it possible for finance businesses to relocate operations out of London without giving up the city’s unique advantages?

Costs and Competition are Top Concerns for Finance Businesses

First of all, it should be emphasised that reducing costs is a key priority for UK finance companies in 2015. While costs are increasing, new business models and ‘fintech’ innovations are ramping up competition in the sector. In a recent CBI/PwC survey, 53% of finance businesses reported that operating costs had increased, while growing competition was flagged as a ‘top concern’. [2]

In this environment minimising costs is essential. And old assumptions - including the one that says operations must be located in London - have to be challenged.

Offshore? ‘North Shore’? It’s Time to Move East.

This is the industry context that’s encouraging more finance businesses to relocate activities away from London. But while the media has focused on the so-called ‘north-shoring’ of operations to the cities of the Midlands and the North, another movement has quietly gathered pace – the expansion of finance operations to the east of the City, along the London-Essex UK Finance Corridor.

It may well be that this eastward expansion of London’s financial services sector has received less attention precisely because it’s not really news. After all, major businesses such as Liverpool Victoria, RSA, Cofunds, First Data and International Financial Data Services (IFDS) have well established operations in the Essex towns of Brentwood, Chelmsford, Colchester, Basildon and Southend-On-Sea, located along key transport routes stretching east from the City of London. And they’re there because the London-Essex UK Finance Corridor offers advantages to financial services businesses that competitor UK locations simply cannot match…

London for Less: Advantages of the London-Essex UK Finance Corridor

To start with the fundamentals, an eastward location from the City of London can deliver big property cost savings for finance businesses. According to Colliers (2015), a company could save almost £5 million per year on rent alone by relocating a 100,000 sq ft office facility from the City to Essex. Perhaps more surprisingly, the same accommodation would cost £662,000 less per year in Essex than in the UK’s regional ‘core cities’[6]

Then there’s the workforce. With over 100,000[7] workers in the ‘Financial and Business Services’ sector, Essex’s workforce compares well with any competitor UK city location. But that’s before we factor in the wealth of experience offered by the 19% [8] of Essex-based workers that commute to London, and the fact that many of London’s 688,000 [9] finance workers can be accessible to businesses located in Essex.

The Winning Advantage: Unbeaten Connectivity to London and Worldwide

Which leads us to the key advantage for businesses of the London-Essex UK Finance Corridor: fast connectivity to London and the world. Travel times by train between the City of London and Essex’s key financial centres are as little as 28 minutes [10] – less time than it takes to cross London. Essex-based businesses also benefit from London’s global connectivity - all of London’s airports, including Heathrow, can be accessed within just 1 hour 15 minutes. That makes the Corridor an intrinsic extension of London’s world-leading finance cluster, with all the benefits that implies for finance businesses locating there. And that’s a business advantage that no alternative UK location can even begin to rival.

FIND OUT MORE

Contact us to find out more about the advantages of the London-Essex UK Finance Corridor for your business . . .

Corinne Hearne
Inward Investment Officer
London-Essex UK Finance Corridor

T: +44 (0)7702 900667
E: corinne.hearne@investessex.co.uk

Sources:

[1] Colliers, 2015
[2] CBI/PwC Financial Services Survey, Oct 2014
[3] Financial Services (Banking Reform) Act 2013
[4] Brentwood, Chelmsford, Colchester and Basildon (data not available for Southend-On-Sea)
[5] UK ‘Core Cities’: Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield
[6] Based on an average of rents across the Core Cities
[7] ONS Annual Population Survey, 2014
[8] Essex Economic Assessment/Nomis 2010<
[9] TheCityUK, end 2013 data
[10]The Trainline Europe

Corinne Hearne
Corinne Hearne

Inward Investment Manager (London-Essex UK Finance Corridor)

+44 (0) 7702 900667

Biography

With over 25 years’ experience in the Financial Services and Global Relocation industries, Corinne has developed an extensive, specialist, commercial network and has successfully supported projects focused on the strategic development and growth of both overseas and UK companies in business, professional and financial services sectors.