Lee Howard, regional director at Christie & Co, analyses the transactional activity in the UK care market

 

During the first half of 2025, we saw a surge in deal activity within the UK elderly care going concern market, with completions at their highest level and our pipeline 24% ahead of where it was in 2024.

For our Care Market Review 2025 report, published in September, we analysed these transactions to illustrate what’s happening in the market. Here are some of our key findings.

HOW MANY CARE HOMES ARE ON THE MARKET?

Instruction volumes in the first half of 2025 were broadly on par with the second half of 2024, but some 33% lower than the same period in both 2023 and 2024.

This represents a material decline in the volume of elderly care homes coming to the market and is likely due to improved trading conditions in 2024 and operators benefiting from a relative period of stability following the COVID-19 pandemic.

With investor demand remaining strong, competitive bidding is commonplace and is underpinning capital values in the going concern market.

The chart above shows a pattern of lower instruction levels in the second half of the year. Given the National Insurance changes, imminent restrictions on migrant workers, and sub-par local authority fee increases, it will be interesting to see if 2025 bucks the trend.

 

WHAT SIZE ARE THE CARE HOMES ON THE MARKET?

We saw a shift in the profile of care homes coming to the market in the first half of 2025, with a marked increase in the number of smaller care home instructions.

38% of our instructions comprised care homes under 20 beds, compared with 12% in the first half of 2024.

The well-publicised challenges in the sector will have a greater impact on smaller homes, which might explain why a greater number of these providers are looking to exit.

At the other end of the scale, only 5% of our instructions in H1 2025 were for care homes with a capacity of over 60 beds, compared with 15% for the same period in 2024, clearly demonstrating the lack of larger, purpose-built opportunities in the market.

The proportion of care homes coming to the market with a capacity of between 20 and 59 beds in H1 2025 was 56%, compared with 73% in the first half of 2024.

 

WHAT OFFERS ARE BUYERS MAKING, AND AT WHAT PRICE?

Offer volumes in the first half of 2025 were 19% ahead of the same period in 2024.

Excluding Project Oak, offer volumes are at the highest level since the first half of 2021, when we saw a huge upswing in buyer demand following the initial lockdowns in 2020.

There has been a significant increase in buyer appetite in 2025, with a rise in the number of offers across all asset types supporting this positive market sentiment.

Aggregate offer values rose by a notable 30% in the first half of 2025, compared with the prior year, and are at the highest level across the reported period, excluding Project Oak.

 

HOW MANY CARE HOMES ARE SELLING?

Including the second tranche of the FSHCG portfolio, which completed in April 2025 (Project Alder), completion volumes were 12% ahead of H1 2024 and 115% ahead of the second half of 2024.

Along with offer levels, completion volumes are at the highest level across the reported period.

This heightened deal activity is set to continue, with our pipeline of deals in solicitors’ hands being 24% ahead of the same time in 2024.

 

WHAT SIZE ARE THE CARE HOMES THAT ARE SELLING?  

The greatest proportion of our completed deals in the first half of 2025 was for care homes between 20-39 beds, representing 49% of the total.

We concluded a smaller proportion of deals on homes with over 60 beds, representing 17% of the total deals.

The proportion of care home completions comprising over 40 beds in the first half of 2025 was 39%, down from 52% in 2024.

 

To read more about key trends in the UK care market, read our Care Market Review 2025 here.