Care market


the sensitivities of the care sector, and the planning potential of the property. Many traditional buyers rely on mortgage or bank financing, which can delay completion and introduce uncertainty. Another major obstacle for sellers is


planning permission. Many care homes occupy converted residential properties or purpose-built facilities in locations where future use may be restricted. When a property’s next use is uncertain, potential buyers can be deterred leading to protracted negotiations or sales which ultimately don’t complete.


Alternatives to an outright sale: sale and leaseback Not every operator looking to release capital needs or wants to sell outright. In many cases, the core business is sound, but the building itself requires significant capital investment to modernise or comply with standards. If a refurbishment or extension is needed but internal funds are limited, a sale and leaseback agreement can provide an ideal solution. Under a sale and leaseback arrangement,


the property is sold to an investor who then leases it back to the operator on a long- term, secure lease. The operator continues


running the business exactly as before, but without the burden of property ownership or capital expenditure. We often work with clients in this way,


with agreements being structured under the Landlord and Tenant Act, giving operators security of tenure and a predictable rent. This model benefits both parties –


operators can release tied-up capital to reinvest in staff, services, or new sites, while investors gain a stable, long-term tenant operating in a resilient sector. All the while, communities continue to benefit from essential care services in well-maintained premises.


This is why we view these arrangements


as long-term partnerships, not mere transactions.


Sale and leaseback as a growth strategy With interest rates and borrowing costs still relatively high, many care home owners are finding it difficult to access affordable finance for expansion. A sale and leaseback can therefore be used to fund strategic growth. By selling a freehold property while


simultaneously signing a new lease, operators unlock significant equity that can be redeployed elsewhere. This capital can be


Case Study: Transforming a former care home into a SEND School


The demand for Special Educational Needs and Disabilities (SEND) school places continues to rise across the UK, making this sector one of the most resilient and future- proof areas of investment. Last year, Harkalm purchased a council- owned care home in Epsom, Surrey, with the objective of repurposing it into a state-of-the-art SEND school. After winning a competitive bids process, an agreement for lease was agreed and exchanged with Outcomes First Group is a leading UK-based provider specialising in education and therapeutic care services for neurodivergent children, young people, and adults. The acquisition was agreed on a subject-to-planning basis, ensuring that redevelopment could proceed immediately after planning approval was granted. The investment led to a rent of £250,000 p.a. and a 25 year lease agreement with Outcomes First Group. The project addressed a critical shortage of specialist school places in the region. Through comprehensive refurbishment and sustainable design, the former care home,


Former council-owned care home in Epsom


originally holding an EPC rating of ‘E’, was transformed into an energy-efficient ‘A’-rated educational facility. Key environmental upgrades of the


refurbishment included: high-performance insulation and glazing, renewable energy systems including solar generation, water efficiency measures and low-carbon materials and enhanced accessibility and inclusive design features. This redevelopment is an example of our


commitment to adaptive reuse, where we transform existing buildings into assets that deliver both strong financial returns and lasting social value. It demonstrates how care home properties can find new life and purpose in meeting evolving community needs, while preserving their legacy of care and service. We have been pleased to help children with special needs access quality education builds long-term community resilience and opportunities.


34 www.thecarehomeenvironment.com February 2026


William - stock.adobe.com


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