Market overview


n Occupancy levels have returned to pre-pandemic highs, with 69 per cent of respondents reporting occupancy above 90 per cent. Those in Wales reported the strongest levels, with 67 per cent noting occupancy over 95 per cent compared with 50 per cent in Scotland and 28 per cent in England.


n Sixty-eight per cent of respondents reported local authority fee increases of between zero and five per cent, with 31 per cent saying their local authority fees had increased by five per cent to 10 per cent. Interestingly, 92 per cent of Welsh operators reported local authority fee increases of between five per cent and 10 per cent, compared with only 17 per cent in England.


n Private fee rates have risen across all regions, with 67 per cent noting an increase of five per cent to 10 per cent. Fourteen per cent of providers reported private pay increases in excess of 10 per cent, and 19 per cent reported increases of zero per cent to five per cent.


n Ninety-eight per cent of respondents believe that a funding increase of at least five per cent is necessary to make social care sustainable. Notably, 53 per cent feel that a 10 per cent or greater uplift is required, highlighting a strong perception that only substantial investment will address current challenges.


n Forty-nine per cent of operators have


experienced a reduction in agency usage over the last 12 months, whereas only 10 per cent stated agency usage had increased. In Wales, 67 per cent of providers reported no change in agency usage; meanwhile, 14 per cent of Scottish providers reported an increase.


n Less than a third of care operators (31 per cent) believe they will be able to offset the cost inflation from NI changes through their 2025/26 fee increases. A larger proportion (44 per cent) say they will not be able to absorb the costs, while 25 per cent remain unsure.


n Sixty-nine per cent have stalled their growth or investment plans for 2025 due to the recent NI changes, highlighting a significant disruption to sector development.


n Whilst ESG is becoming a more important consideration for investors, only 33 per cent of operators reported having a targeted strategy in place.


Finance A segment from Christie Finance on the finance landscape notes that the care sector continues to attract strong interest from the finance market, with both new and established operators seeking debt funding to support growth. However, securing finance remains challenging due to increasingly rigorous lender requirements. Established operators are leveraging existing


portfolios to fund acquisitions, preserving cash for capital expenditure, as reflected in a 23 per cent rise in average debt balances. New entrants face higher investment thresholds but benefit from increased availability of smaller, first-time buyer homes, with Christie Finance reporting a 24 per cent rise in single asset instructions. Demand for debt financing is strong


across Christie Finance’s core (up to £5m) and corporate (over £5m) divisions, with core instructions rising to 69 per cent in H1 2024, driven by smaller operators, and corporate activity remaining robust, with a 50 per cent increase in refinancing from 2023 to 2024. Real estate services, including bridging and development finance, are also in higher demand. Operators are increasingly exploring


diverse financing options – commercial mortgages, unsecured loans, asset finance – to upgrade facilities and expand services. As the Bank of England base rate declines, lenders are offering finer margins, though credit processes remain slow due to regulatory complexity.n


Richard Lunn


Richard Lunn has over 30 years’ experience in the healthcare sector, having joined Christie & Co from the retirement housing developer, McCarthy Stone, in 1989, and becoming head of healthcare in 1999. Working with our agency and advisory teams, Richard has developed unrivalled relationships with the top corporate and regional healthcare operators, banks, private equity, and Real Estate Investment Trusts (REITS), creating the leading healthcare advisory services team in the UK, which annually transacts over half of all care home sales in the UK.


Christie & Co completions by buyer type 22 www.thecarehomeenvironment.com January 2026


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