UK Elderly Care MarketBeat Reports

For the data behind the commentary, download the full Q3 2025 UK Elderly Care Report.

Strong Pipeline Amid Softer Transaction Volumes 

Q3 2025 recorded approximately £470 million of transactions, bringing year-to-date volumes to £2.24 billion — up 24.1% on the same point in 2024. The shift in deal structures continues, with management contracts and WholeCo models now taking precedence over traditional sale-and-leasebacks. This evolution signals an increasingly sophisticated and flexible investment environment, with transactional momentum expected to strengthen through late 2025 and into 2026. 

Continued International Investor Focus

Overseas capital continues to dominate market activity. Major U.S. REITs are increasingly adopting flexible ownership structures, including RIDEA and management contracts, to enhance both operational control and scalability. At the same time, new entrants from other global regions are emerging, broadening participation and diversifying capital sources. While domestic investment has moderated, UK capital remains active and engaged, supporting a healthy mix of investors heading into 2026. 

Strong Investor Appetite Across the Market 

Despite a softer quarter, demand for healthcare real estate remains broad and balanced, spanning PropCo, OpCo, WholeCo, and land transactions. The midmarket segment continues to attract heightened attention, supported by its resilient fundamentals and favourable demographics. Investors are active across the quality spectrum — from prime Grade A assets to well-performing Grade C homes — highlighting the sector’s enduring appeal and structural strength. 

Occupancy

Market occupancy remained stable at 88.9% in Q2 2025, sustaining the strong levels seen over the past 30 months. Grades B and C continue to outperform prime stock, reflecting the robust demand within the midmarket and value-driven segments. The persistent gap between Grade A and subprime stock underscores differing consumer bases but does not signal weakness. Occupancy levels appear well-positioned to remain steady, underpinning operator confidence heading into 2026. 

Average Weekly Fees 

Average Weekly Fees (AWFs) continued to rise in response to cost pressures, with Q2 2025 showing a 7.2% year-on-year increase to £1,386 across all stock. Growth was strongest across Grade B and C stock, which rose 10.5% and 9.5%, respectively, while Grade A homes increased 6.2%. These uplifts reflect both the pass-through of inflationary costs and the market’s capacity to absorb higher fees without material occupancy impact. The coming months will show whether further adjustments are required to preserve margins as operators continue to balance cost control with affordability. 

Profit 

Despite mounting cost headwinds the sector has shown remarkable resilience in profitability. Average profit margins remain healthy at 28.6%. Grade A stock continues to lead with 36.9%, compared to 31.7% for Grade B and 23.4% for Grade C. As the cost environment evolves, maintaining these levels will depend on further fee optimisation and continued operational efficiency, but early data suggests the sector remains well-positioned to withstand near-term pressures.