London restaurants: 1 in 4 closed within 18 months (2024–2025)
One in four London restaurants that opened in 2024 closed within 18 months. Rising rents, energy costs and post-COVID consumer habit shifts are squeezing margins to breaking point.
London's restaurant sector continues to face a brutal attrition rate. Analysis of Companies House incorporation and dissolution records, cross-referenced with FSA registration data, shows that 26% of restaurants opening in London in 2024 had closed by Q1 2026 — an 18-month survival rate of 74%.
The national 18-month survival rate for restaurants sits at 79%, making London's closure rate notably worse despite the city's larger consumer base and higher average spend per visit.
The primary drivers are well-documented: commercial rents in prime London locations have risen 14% since 2023, energy costs remain 31% above pre-2022 levels, and food costs (particularly for proteins) have increased 18% year-on-year. Meanwhile, consumer footfall in office districts has not fully recovered, with Tuesday-to-Thursday attendance in the City and Canary Wharf still 22% below 2019 peaks.
Borough-level variation is stark. In Kensington & Chelsea and the City of Westminster, the 18-month closure rate reaches 31%. In contrast, restaurants in Hackney, Newham, and Lewisham — where rents are lower and communities more residential — show 18-month survival rates above 82%.
The formats most at risk are mid-price sit-down restaurants (mains £15–£25) in high-footfall tourist zones. The most resilient are neighbourhood independents with strong community regulars and hybrid delivery-plus-dine-in models.
Methodology note
Companies House incorporation (SIC 56101, 56102) and dissolution records for London businesses, January 2024–March 2026. Cross-referenced with FSA registration cancellations. Sample 2026 — illustrative.
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