Market overview
Care Market Review 2025: the key highlights
Richard Lunn, managing director – care at Christie & Co, gives us a timely overview of the current state of the UK care market
We recently launched our annual Care Market Review 2025 report, which analyses a range of topics relating to the UK healthcare business market, including capital markets, land and development, the transactional market, shifts in local authority fee rates, operator sentiment, and the finance landscape. Here are some of the key highlights from
the report and what you need to know about the UK care market.
Overview Overall, we saw extremely positive market activity throughout 2025, as many operators looked to grow their portfolios. By the end of August, we had already transacted more deals than in 2024, and our forward pipeline is the highest ever, reflecting the investor and operator desire to acquire care services. On a recent trip to the USA, investors called this a ‘Goldilocks period’ for senior care providers and investors, with the much- heralded arrival of the huge demographic wave of elderly people requiring care and support and limited quality supply to meet this demand in future years.
Capital markets Healthcare remains a compelling investment due to strong demographic drivers,
particularly the ageing population and rising life expectancy, with the over-80s population expected to more than double by 2050. Investor interest is further supported by ESG credentials and inflation-linked, long- income lease structures. The 12 months to July 2025 marked
a period of strategic realignment amid ongoing macroeconomic and geopolitical shifts, with the market evolving via increased M&A, joint ventures, and a growing focus on management contracts. Overseas capital significantly boosted deal activity during this time, with sector- specialist REITs like Welltower and Omega leading major acquisitions, including Care UK and 45 Four Seasons care homes (led by us at Christie & Co), respectively. H1 2025 also saw robust investor activity, including notable M&A deals like Care Trust REIT’s acquisition of Care REIT plc and the Aedifica-Cofinimmo merger. While operators are increasingly using
lease-based models and sale-and-leaseback structures to unlock capital, looking ahead, we expect to see more investors exploring sale and manage-back models, offering higher returns with greater operational exposure. As you read this in early 2026, the needs- driven fundamentals are stronger than
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www.thecarehomeenvironment.com January 2026
ever, and with an increasing number of European/overseas funds actively evaluating opportunities in the UK alongside the established base of current investors, the range of funding options available is likely to increase.
Land and development The UK care home development sector continues to face a complex and unpredictable planning environment, hindered by under-resourced local authorities and evolving policies like Nitrate Neutrality and Biodiversity Net Gain, though 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 driven by an ageing population that is forecast to exceed 16 million people aged 65+ within a decade. Developers are increasingly forming
joint ventures to share risk and reward, while operators adopt more efficient spatial standards (50 to 52 square meters per resident) and value-engineered designs to offset high costs. Larger schemes – now averaging over 70 beds – are gaining traction due to economies of scale, and ESG considerations remain central, with high
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