UK Elderly Care MarketBeat Reports

For the data behind the commentary, download the full Q1 2025 UK Elderly Care Report.

No Rest for Investment

Q1 2025 maintained strong momentum from 2024, with the total investment volume reaching approximately £797m. Notably, the start of 2025 has significantly outpaced 2024, with investment volumes up 55% year-over-year. While a few large WholeCo deals carried over from late 2024 contributed, a key driver of growth has been a wave of mid scale acquisitions, highlighting sustained investor confidence.

Continued Non-Domestic Investment

Non-Domestic Investment continues to become more pronounced in the market, with US capital emerging as the dominant force in the UK elderly care market. Q1-2025 saw over 68% of total volume (£531m) originating from US funds. This reflects a broader macro trend across the care sector as US REITs increasingly expand their UK presence.

Healthy Deal Quantum

While large transactions often dominate discussions, the overall health of the market is also reflected in the volume of smaller, mid-market deals. In Q1 2025, these transactions—primarily WholeCo acquisitions by regional operators—accounted for approximately 75% deals (< £15 million).

Occupancy

The overarching theme for occupancy is stability. After three years of consistent growth, the market appears to have leveled off at around 89%. Notably, the occupancy gap between different asset grades has tightened, with Grade A assets holding steady at 86.6%, while lower-quality stock (Grades B and C) sits slightly higher at 89.0%.

Average Weekly Fees

AWF continued its steady growth through Q4 and throughout 2024, despite stabilizing inflation rates over the year. Across all stock, Q4 fees closed at approximately £1,250, marking an 8.2% year-over-year increase. Grade A stock (£1,656) commands higher fees than Grade B (£1,268) and Grade C (£1,089). The regional disparity in AWF persists, with southern regions outperforming. Both private and public pay consumers are willing to pay higher fees.

Profit

EBITDARM trends can be influenced by various factors, but throughout 2024, rising fees drove margin expansion across all asset grades. Grade A continues to achieve higher margins compared to Grades B and C. However, cost headwinds, including higher Employers NIC and National Minimum Wage, will challenge margin growth in 2025. Sustaining recent fee growth of 8.2% will be crucial to weathering these challenges.