Flexible Office vs Lease in London: Contracts, Terms, Deposits and Tax (2026)

In London the contract decides almost everything else: the term, the deposit, who fits out the space, and whether you need a local company to sign. This guide sets the three contract forms side by side and then covers what a company from abroad needs in place before it signs. Prices are quoted per desk per month for flexible space and per square foot per year for leases, both before VAT at 20%.

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The three contracts

Serviced office or coworking private office

A licence agreement, not a lease. Terms run from one month to twelve, rolling monthly after the initial period with one to three months’ notice. One all-in monthly fee per desk covers rent, business rates, utilities, cleaning, internet, reception and a meeting-room allowance. A deposit of one to two months is standard. No security of tenure: the Landlord and Tenant Act 1954 does not apply to a licence.

Managed office

A longer agreement, typically twelve to thirty-six months, for a self-contained floor the operator fits out and runs. Priced per desk or per floor per month, all-in. Suits teams of twenty and up that want their own front door without a lease.

Conventional lease

Usually five to ten years with a tenant break at year three or five, on full-repairing-and-insuring terms: rent per square foot per year, plus business rates, a service charge, insurance, utilities and your own fit-out. Expect a rent deposit of three to six months’ rent and a dilapidations obligation at the end. Leases are often contracted out of the 1954 Act’s security of tenure, which you should check before signing.

Side by side

Setting up as a company from abroad

• A non-UK company can take flexible space directly; most operators ask for ID, proof of address and the company’s registration certificate. Some want a UK entity or a personal guarantee for longer managed-office terms.
• Registering a UK limited company at Companies House takes a day or two online and costs a small fee. The company needs a registered office address in the UK, which is why many operators sell a virtual-office product: a registered address and mail handling without a desk.
• No licence or permit is required to occupy an office. Business rates are a local tax on the premises; in flexible space they are inside the monthly fee, in a lease they are yours to pay and worth checking against the rateable value before you commit.
• VAT: most operators and landlords charge VAT at 20% on top of the quoted price. A VAT-registered tenant recovers it; a non-UK company usually cannot, so compare prices with VAT included.

Who pays

• Flexible space: the operator pays the introducer a referral fee when a tenant signs, typically a share of the first-year contract value. The tenant pays nothing extra, and the price is the same whether they come direct or through SquareFoot.
• Leases: the landlord’s agent markets the space; a tenant who appoints their own adviser (tenant representation) usually negotiates that fee as a share of the saving or a share of the landlord’s letting fee. Many small tenants go without one.

SquareFoot lists 178 flexible office centres in London from 16 operators, collected October 2026 from the operators’ own published pages. Guide written by SquareFoot; last reviewed October 2026.

Frequently asked questions

Is a flexible office in London a lease?

No. It is a licence or service agreement for a fitted room with one monthly fee, usually one to twelve months and rolling after that. It gives no security of tenure and no fit-out obligation, which is the trade-off against a conventional lease.

Do I need a UK company to rent an office in London?

Not for flexible space: a foreign company can sign a licence with proof of registration and ID. A conventional lease usually needs a UK entity or a guarantee. Registering a UK limited company at Companies House takes a day or two.

What does an office licence cover in London?

One monthly fee per desk covering rent, business rates, utilities, cleaning, internet, reception and a meeting-room allowance, plus VAT. Terms run one to twelve months and roll monthly after that.

Related: How to find office space in London · Where to put an office in London · London Office Space Price Index · Live listings in London

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