Equity Finance and the UK Regions

This report examines regional disparities in UK equity finance using data covering 60,543 deals totaling £145.3bn invested across 25,002 companies from 2011 to 2025 Q3. We document intensifying geographic concentration, with London capturing 47.2% of deals and 57.0% of invested value, while concentration indices rose 74% between 2011 and 2024. Econometric analysis using propensity score matching reveals persistent regional disadvantages beyond firm characteristics. Regional firms secure 8-18% smaller deal sizes than comparable London firms, with largest discounts in Yorkshire and the Humber (-17.8%) and the Midlands. We estimate the UK's 2024 equity gap at £8.1bn unadjusted, compressing to £0.75bn after incorporating behavioural frictions, with approximately 72% concentrated in growth-stage rather than seedstage finance. Regional proportional gaps remain elevated in thinner markets-East Midlands (22%), West Midlands (11%)-versus London (3%), demonstrating persistent place-based constraints. The findings indicate the binding constraint has shifted to scale-up capital and inform policy interventions targeting regional equity market development.