Commercial office leasing London: costs, process & expert guide

A practical guide to leasing office space in London, including current costs, lease terms, deposits, break clauses and how leasing compares with serviced and managed offices.

Leasing an office in London can give your business greater control over its workplace, but it also comes with more responsibility and usually a much longer commitment than flexible office space.

A traditional lease may initially look cheaper than a serviced or managed office because the rent is quoted separately. But rent is only part of the cost.

Business rates, service charges, fit-out, furniture, utilities, internet, cleaning, maintenance and professional fees can all sit on top.

That is why the first question should not be:

How much is the rent?

It should be:

What will this office actually cost us to occupy, and how certain are we that we will still need it in three or five years?

For businesses with predictable headcount and long-term plans, leasing can work extremely well. For growing or changing teams, serviced or managed workspace may provide a better balance of cost, flexibility and risk.

What is a commercial office lease?

A commercial office lease is an agreement between a business and a landlord giving the business the right to occupy an office for an agreed period.

Traditional London office leases commonly involve commitments of several years. The existing London Offices guide uses approximately 3–10 years as a typical range.

Unlike a serviced office, the tenant normally takes greater responsibility for operating the space.

That can include arranging the fit-out, furniture, utilities, internet, cleaning, maintenance and other workplace services.
In return, your business has much greater control over the office.

You can decide how it looks, how it is configured and how your employees use it.

Find an office

Should you choose a serviced, managed or leased office?

Before starting a traditional office search, it is worth comparing the three main private-office routes.

Serviced office

A serviced office is already furnished and ready to use.

The operator usually bundles furniture, internet, utilities, cleaning, maintenance and many other occupancy costs into one monthly payment.

London’s current flexible-office benchmark is around £625 per desk per month, with mainstream serviced and private offices generally falling between roughly £450 and £800 per desk.

Serviced offices work particularly well when your team is growing, headcount is uncertain or you need to move quickly.

Managed office

A managed office gives your company a more dedicated and customisable environment.

You can often control branding, layout, meeting rooms and furniture, while the provider still handles much of the property and facilities management.

Managed offices therefore sit between serviced space and traditional leasing.

They can work particularly well for larger teams that want their office to feel like their own headquarters but do not want to manage a full lease themselves.

Traditional lease

A traditional lease gives you the greatest control.

Your company rents the office directly from a landlord and takes on much more responsibility for setting it up and running it.

It usually makes the most sense when headcount is predictable, the business plans to stay for several years and complete control of the workplace is important.

For a fuller comparison, read our Serviced vs Managed vs Coworking vs Lease: London Office Guide.

How much does commercial office leasing cost in London?

Traditional office leases are normally priced by square foot rather than by desk.

Current 2026 market evidence shows just how much location and building quality affect the rent.

Grade A fitted office rents in the City are currently around £85–£130 per sq ft per year, while Mayfair and St James’s can reach approximately £125–£260 per sq ft.

These are premium central London figures rather than a London-wide minimum.

The important thing is that the advertised rent is not your total occupancy cost.

The real cost of leasing can include:

Base rent
The amount agreed with the landlord for the office itself.
Business rates
Most businesses occupying non-domestic property need to pay business rates. The amount is based on the property’s rateable value and the relevant multiplier.
Service charge
A contribution towards services and maintenance for shared parts of the building. Exactly what this covers depends on the property and lease.
Fit-out
Partitions, meeting rooms, kitchens, cabling, lighting, finishes and other work needed to turn an empty or basic office into a functioning workplace.
Furniture
Desks, chairs, meeting-room furniture, storage and breakout furniture.
Internet and technology
Connectivity, cabling, Wi-Fi, access control and other workplace technology.
Utilities
Electricity, heating, cooling and water where these are not included elsewhere.
Cleaning and maintenance
Legal and professional fees
Insurance
Dilapidations
You may have obligations to repair or reinstate the office when your lease ends.

The cheapest-looking rent can therefore become considerably more expensive once the office is ready to use.

What does a leased office actually cost compared with serviced space?

Comparing £ per sq ft with £ per desk can be misleading because the two products include different things.

Take a 10-person business.

At London’s flexible-office benchmark of around £625 per desk, a serviced office would cost approximately:

10 × £625 = £6,250 per month

or:

£75,000 per year.

A traditional office needs enough floor space for desks plus meeting rooms, kitchen space, circulation and storage.

If a 10-person company takes approximately 1,000 sq ft in a City building at £90 per sq ft:

1,000 × £90 = £90,000 per year

or:

£7,500 per month in rent alone.

That still excludes business rates, service charge, utilities, furniture, fit-out, cleaning and other operating costs.

This does not mean a serviced office is always cheaper.

It means the two options need to be compared using total occupancy cost, not headline rent.

For current flexible-office costs by location and team size, see our London Office Cost & Price Index 2026.

What about a 12-month office lease?

A 12-month requirement is where a traditional lease often becomes much harder to justify.

Short commercial leases do exist, but a business still has to consider the time and money required to make the office usable.

Imagine a 10-person company knows it only needs a London office for 12 months.

A serviced office at the current £625 benchmark would be approximately:

£6,250 per month

or:

£75,000 over 12 months.

Furniture, internet, utilities, cleaning and many building services are typically already included.

Now imagine the same company takes a 1,000 sq ft traditional City office at £90 per sq ft.

The base rent alone is:

£90,000 for 12 months.

Then add business rates, service charge, legal costs, furniture, connectivity and potentially fit-out.

Even if the leased office has a lower rent in another London area, spending significant money on fit-out for only one year can be difficult to recover.

A short-term requirement therefore usually strengthens the case for serviced or managed space, particularly if the office is needed quickly.

London Offices says flexible workspaces can sometimes be occupied only two or three days after signing, although around a month is more typical.

How long are London office leases?

Traditional office leases commonly run for several years.

Three, five and ten-year agreements are common structures, although the exact term depends on the building, landlord and tenant.

Longer leases can sometimes give businesses stronger negotiating power around rent, incentives or fit-out contributions.

But they also increase the risk of being stuck with the wrong amount of space.

If your 30-person team becomes a 60-person business, the office may become too small.

If the same team becomes more hybrid and only 15 people attend regularly, you could spend years paying for unused space.

This is why lease length should reflect how far ahead your company can genuinely predict its requirements.

How much deposit will you need for a commercial office?

Commercial rent deposits are negotiable and vary according to the landlord, tenant and strength of the business.

For newer or less established companies, landlords may ask for several months of rent as security.

A commercial leasing code of practice notes that landlords may request cash deposits of around three or six months’ rent, with the deposit terms documented separately.

Real small-business experiences show just how much this can vary.

Businesses discussing commercial property have reported anything from around one month’s rent to six months or more, particularly for younger companies.

For example, if your annual rent is £120,000:

Three-month deposit = £30,000

Six-month deposit = £60,000

That is cash the business may need to commit before paying for its fit-out, furniture and other moving costs.

Ask about the deposit early in the search rather than discovering it at the end of negotiations.

Is the deposit the same as paying rent upfront?

No.

A rent deposit is normally held as security against obligations under the lease.

You will generally still need to pay your rent separately according to the payment schedule agreed in the lease.

This distinction regularly causes confusion for first-time commercial tenants. Small-business discussions include founders surprised to discover that a multi-month deposit is held separately rather than simply paying their first few months of rent.

Your solicitor should confirm exactly how the deposit is held, when the landlord can use it and how and when it is returned.

What is a break clause?

A break clause gives the landlord, tenant or both the ability to end a fixed-term lease earlier than its final expiry date, provided the conditions in the lease are met.

For example, a five-year lease might include a tenant break at the end of year three.

This means the business can potentially leave after three years rather than being committed for the full five.
Break clauses are extremely important where future headcount is uncertain.

But having a break clause does not necessarily mean you can simply hand back the keys whenever you want.

Commercial break clauses usually require formal notice, and the lease may contain conditions that must be satisfied before the break becomes effective. Government guidance confirms that fixed-term leases can contain break options and that conditions attached to them need to be met.

RICS also warns that break clauses are interpreted strictly, making the precise wording important.

Have your solicitor review the break clause before signing rather than assuming you will be able to leave easily later.

What should you check in a break clause?

Look at:

The break date
Can you leave after two years, three years or only much later?
The notice period
How far in advance must notice be served?
Who can exercise it
Tenant, landlord or both?
Conditions
Do you need to have paid all rent, vacated completely or complied with other lease obligations?
How notice must be served
Break notices need to follow the procedure set out in the lease.

A break clause is only useful if your business can realistically exercise it.

What other lease costs catch businesses out?

Cost surprises are one of the biggest concerns for first-time commercial tenants.

Small-business discussions repeatedly mention business rates, service charges, deposits, repair obligations and utilities as areas that were not always obvious from the headline rent.

Before agreeing to a lease, ask for clarity on the following.

Service charge

If the office is in a multi-tenant building, you may pay towards cleaning, reception, security, lifts, maintenance and shared areas.

Ask what the current charge is, what it covers and whether significant increases or works are expected.

Business rates

Business rates are separate from rent on most conventional leases.

The 2026 revaluation came into effect in England on 1 April 2026, so use the current rateable value rather than relying on an old marketing brochure.

Repairs

Understand exactly which parts of the property you are responsible for maintaining.

Fit-out and reinstatement

Check both what you need to do before moving in and what the landlord expects when you leave.

Utilities

Ask whether electricity and other utilities are separately metered, directly contracted or recovered through a building charge.

VAT

Check whether VAT is payable on the rent and other property charges.

Professional fees

Allow for solicitors, surveyors and any other advisers used during the transaction.

The aim should be to understand the full annual occupancy cost before signing, not after the first invoice arrives.

How to lease office space in London

Step 1: Define what your business actually needs

Start with your team rather than browsing properties.

Confirm your current headcount, expected growth, preferred locations, working pattern and budget.

Think about how many people will actually attend on the busiest day rather than automatically taking a desk for every employee.

You should also decide which requirements are essential.

That might include meeting rooms, 24/7 access, bike storage, showers, client-facing reception space or specialist technology.

Step 2: Decide whether you actually need a traditional lease

Before approaching landlords, compare leasing with serviced and managed alternatives.

Ask:

How predictable is our headcount?
How long do we expect to stay?
How important is complete control over the office?
How much cash are we willing to invest upfront?
How quickly do we need to move?

If you need an office next month and could double in size next year, a traditional lease may create more problems than it solves.

If you expect to occupy the same office for five years and want complete control over the environment, leasing becomes much more compelling.

Step 3: Set your total budget

Do not set a budget based only on rent.

Your budget should allow for:

rent
deposit
business rates
service charge
fit-out
furniture
utilities
internet
cleaning
maintenance
insurance
professional fees
moving costs.

This is where businesses often underestimate the true commitment.

One London small-business owner described struggling with whether an annual office cost representing around 10% of profit was justified, even though the business could technically afford it.

The question is not only whether the company can pay for the office.

It is whether the office represents the best use of that money.

Step 4: Work with an office broker

A broker can help you understand what is actually available, compare different office models and avoid wasting time viewing properties that do not fit your requirement.

London Offices works across more than 600 London offices, and its search service is free to businesses because workspace partners pay when a successful match is made.

A broker can help with:

defining the requirement
identifying suitable areas
shortlisting options
arranging viewings
comparing serviced, managed and leased space
negotiating commercial terms
helping you understand what is included.
The broker does not replace your solicitor or surveyor.

Their role is to help you navigate the property market and negotiate the commercial deal.

Start your London office search

Step 5: View and compare offices

Try not to judge offices on appearance alone.

Consider how the space will work when the entire team is present.

Check natural light, noise, meeting-room capacity, lifts, air conditioning, access, showers, cycle facilities and the surrounding area.

For leased offices, also look at the condition of the property closely.

If significant work is required, understand who will pay for it before progressing.

Step 6: Negotiate the heads of terms

Heads of terms set out the key commercial points before the full lease is prepared.

These can include:

rent
lease length
break clause
deposit
rent-free period
rent review
service charge
repair obligations
permitted use
fit-out responsibilities.

Do not treat these as minor details.

A slightly lower rent can be worth far less than a useful break clause, lower deposit or meaningful rent-free period.

Step 7: Appoint a commercial property solicitor

Commercial leases can contain obligations that continue for years.

A solicitor should review the lease and explain the legal implications before you sign.

Issues around break clauses, repairing obligations, lease renewal rights and permitted use are particularly important.

A lease may also be protected by the Landlord and Tenant Act 1954, or the parties may agree that it sits outside those renewal protections. Government guidance recommends checking the lease to understand its position.

Step 8: Plan the fit-out and move

Once terms are agreed, the office may still need substantial work before employees can use it.

Allow time for:

design
approvals
contractors
partitions
furniture
power and data
Wi-Fi
meeting rooms
kitchens
branding
testing.

This is one of the biggest differences between leased and flexible workspace.

With serviced space, the business can often arrive with laptops and begin working.

With a lease, getting the keys may only be the beginning.

How quickly can you move into a leased office?

A traditional lease is rarely the fastest route.

Legal negotiations, surveys, landlord approvals and fit-out can all extend the timeline.

If speed is important, compare the lease against a move-in ready alternative before committing.

London Offices reports that some flexible workspace customers have moved in only two or three days after signing, although closer to a month is more typical.

For a company whose existing lease ends soon or that needs to accommodate a rapidly growing team, that difference can be significant.

When should you use an office broker?

A broker is particularly useful when:

you are not familiar with the London office market
you are comparing several areas
you do not know whether serviced, managed or leased space is right
you need to move quickly
you want help understanding current pricing
you need multiple options compared at once
you want support negotiating the commercial terms.

It can also help prevent a common mistake: spending weeks contacting individual landlords and operators without having a clear view of the wider market.

London Offices says its advisers discuss the requirement, source suitable spaces, organise viewings and negotiate pricing on behalf of the business.

For a straightforward renewal where you already know exactly which property you want, you may need less search support, although professional legal and property advice can still be important.