UK Elderly Care MarketBeat Reports

For the data behind the commentary, download the full Q2 2025 UK Elderly Care Report.

Sustained Investment Momentum

Q2 2025 reaffirmed the strength of investor appetite, bringing total H1 transactional volumes to approximately £1.75 billion, more than double the volume recorded in H1 2024. While the £640 million Care REIT plc acquisition by U.S.-based CareTrust REIT contributed significantly to overall volume, activity was broad-based, with both large platform acquisitions and a steady stream of midmarket deals.

Global Investor Appetite Remains High

Global Investment - particularly from the U.S. - remains the dominant force, with over 71% of H1 2025 transaction volume originating from U.S. investors. This ongoing trend is led by major REITs, many of which are leveraging flexible ownership models, including RIDEA structures and management contracts, which allow greater control over both the real estate and operations.

Rising Activity in the Midmarket Segment

While prime and super-prime assets remain in focus, mid-market activity is clearly on the rise, with investors such as Omega Healthcare Investors targeting midmarket assets in H1 2025. This growing momentum reflects increasing recognition of the segment’s strategic value, driven by consolidation opportunities and the fragmented nature of UK care home ownership.

Occupancy

Occupancy remained stable into Q1 2025 at 89.6%, continuing the steady levels seen throughout 2024. Importantly, the gap between asset grades continues to narrow, with Grade A occupancy increasing to 87.0%, while Grade B and C stock hold strong at 91.0% and 89.5%, respectively.

Average Weekly Fees

AWF growth remained steady year-over-year, with Q1 2025 averaging £1,260, a 7.9% increase from the prior year. However, quarter-on-quarter growth has slowed, rising only marginally from Q4’s £1,250. Grade A assets still command a premium (£1,650), compared to Grade B (£1,300) and Grade C (£1,100). With many operators implementing their annual fee uplifts in Q2, further increases are expected as operators respond to cost headwinds.

Profit

While margins remained relatively healthy in Q1, the limited AWF growth highlights the emerging pressure on profitability. EBITDARM margins are increasingly challenged by cost headwinds, particularly from the National Living Wage and Employers’ National Insurance increases. Looking ahead, as the impacts of the NLW and Employers’ NI increases begin to filter through from Q2 onward, the focus will shift to how operators adjust fee structures - and the resulting effect on margins.