Demand continues to rise
An ever-ageing population continues to lift demand for care home beds in the UK. Recent data released by carehome.co.uk, which lists all the nation’s registered care homes, details the current size of the sector, where 7,338 service providers operate 16,441 registered care homes with a combined capacity of 529,549 beds.
Supply gap and growth outlook
Care home trends already show demand outstripping supply, with property consultants Savills predicting that the number of beds will need to increase by 144,000 over the next 10 years to keep pace with growth in the elderly population.
Shift to larger purpose-built homes
In recent years, there has been a marked shift in the market away from the standard, converted house type setting, to larger purpose-built care homes. Data from carehome.co.uk shows a current average of 32 residents per care home. This compares to an average of 39 residents per care home for the 381 new care homes registered during the 12 months to 1 January 2025. Many private operators are increasingly targeting 60 to 80 resident homes to achieve economies of scale. Christie & Co. saw large care homes become more desirable for buyers in 2024, with homes providing more than 40 beds comprising 58% of sales, compared to 52% in 2023.
Funding pressures and changing patterns of care
With increasingly stretched council budgets, another trend experienced in the sector is the imposition of caps on how much councils can pay towards residential and nursing care, and the increasing use of home care. This is leading to more families contributing to care costs and paying top up fees so their family member can secure a care home of their choice.
Operating performance remains resilient
Despite this squeeze on public funding, analysis by Knight Frank points to a resilient sector. Their research indicates strengthening operational indicators including a 9.8% annual increase in average fee income to £1,298 per week in 2025, average occupancy levels increasing from 88.3% to 88.7% and average EBITDARM margins growing four percentage points to 30.1%. Homes between 60 and 100 beds are the most profitable size range, operating at margins of around 33%, supporting the trend for larger homes.
How Vickery Holman can help
Here at Vickery Holman we act for care home operators across the South West, providing a range of property and funding related services. Our Healthcare team also supports the wider sector including GPs, dentists and vets with valuation, rent review, Business Rates and building advice. Please don’t hesitate to get in touch with Vickery Holman if you think we could be of assistance. Healthcare Property Services: Expert Advice and Support – Vickery Holman
