New Report Reveals 10% Year-On-Year Increase In Care Home Fees
A new report released by carehome.co.uk, Caring Britain: How the care home landscape is changing, reveals how the UK’s care home market is evolving amid rising costs, growing demand and increasing complexity of care needs.
The data shows that average weekly care home self-funded fees increased by 10% in the year to December 2025, as providers responded to rising wage costs, energy prices and broader inflationary pressures.
Fee growth for self-funders varied by region, ranging from 7.8% in the East of England to 11.3% in the North West.
Scotland and London are the most expensive regions in the UK, with average weekly self-funded fees exceeding £1,500. By contrast, the North East of England is the most affordable region at approximately £1,100 per week.
At the same time, the structure of the sector is shifting towards larger providers.
The average care home now provides 47 beds, with the strongest growth among homes with 60-79 beds (3.6%). Meanwhile, the number of smaller homes offering fewer than 20 beds declined by around 6% in the year to December 2025.
The data shows that purpose-built homes make up 57% of provision, underlining a shift towards modern, accessible environments designed to accommodate increasingly complex care needs.
Regionally, bed growth was strongest in the South East and West Midlands (1.8% and 1.5% respectively), while London and Scotland saw slight declines in overall capacity, reflecting limited opportunities for new development in dense or constrained markets.
The report also highlights uneven access to specialist services, particularly for people living with dementia.
While many homes are equipped to support residents in the early stages of dementia, provision reduces significantly for advanced and complex dementia care.
In London, 57% of care homes meet higher-level dementia needs. In comparison, just 33% of homes in Wales and 34% in the North West of England offer this level of support.
The report from carehome.co.uk also analyses regulator ratings, showing regional variations and gaps in inspections.
While just under 70% of homes in England are rated as ‘Good’ or ‘Outstanding by the Care Quality Commission (CQC), this rises to 80% for London and the North East. In comparison, this figure stands at 63% for the West Midlands and 66% for Yorkshire and the East of England.
Importantly, the report also looks at the frequency of inspections, and finds that around one in seven care homes are currently unrated in England, and over half of care homes have not been rated in the last four years. In some cases, this reflects changes in ownership, as ratings do not transfer when a care home is sold and providers must be re-rated under their new registration.
Will Blackwell, CEO of Tomorrow’s Guides which operates carehome.co.uk, said: “Our new report highlights a sector in transition. Growing demand from an ageing population, increasing complexity of need, workforce shortages and sustained cost pressures are fundamentally reshaping how care is delivered across the UK.
“Our data shows care homes are changing in structure with a shift towards large, purpose-built homes that can cater for increasingly complex care needs. At the same time, access to specialist care such as dementia care is dictated by a postcode lottery, leaving those affected not getting the support they desperately need.
“At a time when regulatory ratings may not always reflect the most up-to-date reality, trusted reviews and transparent provider information play an increasingly important role. Early planning and access to clear, reliable information can make a significant difference in helping families navigate what is often one of the most important and emotional decisions they will ever face.”
Professor Martin Green OBE, Chief Executive of Care England, said: “This report clearly shows that the lack of a strategic approach by the Government is delivering a significant financial and geographical divide across the country.
“Public under-funding is driving smaller care homes out of the sector and the only way to stay viable is to increase the size and scale of each home. There is clearly a need for high-quality care, but Government policy is denying access and choice to publicly funded citizens.
“The fact that care home fees have risen by 10% shows the enormous financial pressures that are placed on care home providers. These increases are levied reluctantly, but they are necessary to sustain care homes and the care they provide.”
