Research by Alliance & Leicester discovered that Cambridge was the second most expensive location, followed by Oxford.

Andy Homer, a spokesman for the firm, told BBC Radio 5 Live’s Wake Up to Money programme that businesses cited rental costs for commercial premises as one of their major concerns.

Milton Keynes was found to be the most expensive place to rent business property, with prices at an average of £2,500 per square metre.

There are stresses for space in the area because it is a ‘growing city’ and weekly wages are among the highest in the country, Homer explained.

He added: ‘I think business owners have to be aware of all the costs involved with setting up a business and they need to ensure that they can keep their costs to a minimum by regularly reviewing their outgoings, their supplies, the cost of banking.’

According to the government’s start-up advisory service Business Link, SMEs should shop-around for the best deal before choosing their premises.

It recommends visiting the local council for advice, looking for advertising signs outside buildings, searching the internet and checking in local newspapers.

See also: 9 factors that will help you choose the right office location