Lee Howard, Regional Director for Care at Christie & Co, a specialist advisor for buying and selling businesses, shares insights from the newly launched Care Market Review 2025 report.
We recently launched our Care Market Review 2025, which explores a wide range of topics shaping the UK healthcare business market. These include capital markets, land and development, the transactional landscape, changes in local authority fee rates, operator sentiment, and the finance environment. Here are some of the key highlights.
Market overview
The care market remains a strong investment opportunity, underpinned by demographic trends such as an ageing population and rising life expectancy. The number of people aged over 80 is expected to more than double by 2050. Investor interest is also supported by the sector’s ESG credentials and long-term, inflation-linked lease structures.
However, the UK care home development sector continues to face a challenging planning environment. Local authorities are under-resourced, and evolving policies such as Nitrate Neutrality and Biodiversity Net Gain add further complexity. Labour’s pledge to recruit 300 planning officers offers hope for medium-term improvement. Due to planning delays, fully consented sites remain scarce, despite rising demand from a population forecast to exceed 16 million people aged 65+ within the next decade.
While many SME operators paused acquisitions post-pandemic, stabilising costs and improved trading conditions have reignited interest. This has led to strong competition for prime, consented sites and a record H1 2025 in care home land transactions at Christie & Co.
Forward-funding deals are also returning to the sector, and we expect volumes to increase over the next year. Although high build costs have put pressure on land prices, improved operating performance and rising private fee levels have helped maintain land values. Easing inflation has also supported EBITDA growth and valuations.
Senior living developments remain subdued due to high construction costs and a softer housing market. However, demand is growing for inclusive, future-proof housing with communal amenities, driven by lifestyle changes and longer life expectancy.
Transactional analysis
Our analysis of transactions completed by the care team over the past year shows that deal activity is ahead of 2024, with completions at their highest level. Our pipeline is currently 24% ahead of where it was this time last year.
Over 70% of deals involved homes with 20 to 60 beds. There is also demand for homes with over 60 beds, but fewer are transacting as operators are choosing to expand rather than sell. This is reflected in the instructions we’ve received—around 90% are for homes with up to 60 beds. Larger homes (over 60 beds) made up just 5% of instructions, down from 15%, highlighting a shortage of purpose-built facilities coming to market.
We’ve also seen a rise in new operators entering the market. In H1 2025, they accounted for 17% of deals, up from 11% in 2024 and just 4% in 2023. Small and medium-sized groups (three to 19 homes) were the most active buyers, representing 32% of deals, followed closely by independent operators (one to two homes) at 31%.
The number of homes closed and sold with vacant possession rose to 21% in H1 2025, up from 13% in 2024. Encouragingly, 60% of these were reconfigured, reregistered, and reopened as care homes. A further 24% were converted to residential dwellings, and 16% were repurposed for other uses.
Expectations for the Market
- All types of care homes will remain in demand from regional operators looking to grow
- High closure rates at the lower end of the market are likely to continue
- Lease-based and sale-and-leaseback models will remain popular, with more interest in sale and manage-back deals
- The number of new operators entering the market is expected to rise further
Lee Howard, Regional Director for Care, Christie & Co