US Investors Dominating UK Care Homes Market
UK care homes market attracted record-high investment volumes of £4 billion in the 12 months since July 2024, according to real estate services firm Cushman & Wakefield.
Transactional volumes in the sector reached over £1.75 billion in H1 2025, the highest ever total for a six-month period and 108% higher than H1 2024. Occupancy reached nearly 90% in Q1 2025, driven by limited volatility and consistent demand due to the UK’s ageing population.
US investors are the predominant driver of this activity, accounting for more than 70% of transactions, up from 56% in 2024. This reflects strong international confidence in the UK care homes market, with the country’s ageing demographic profile drawing investors to the sector.
Early indicators suggest that the UK Government’s National Living Wage and Employers’ National Insurance increases – combined with typical timing of annual operator fee uplifts – are driving up Average Weekly Fees (AWFs).
Paid by care home residents and often subsidised by Councils, these fees stood at £1,260 in Q1 2025, the highest rates on record. Preliminary data from Q2 shows that they have continued to rise, driven by the National Living Wage and Employers’ National Insurance increases, which took effect on April 1st.
Source: Cushman & Wakefield
The investment environment is characterised by high-value portfolio acquisitions, says Cushman & Wakefield, including the £640 million acquisition of Care REIT plc by CareTrust REIT, as well as growing midmarket transaction activity – with investors such as Omega Healthcare actively targeting midmarket assets.
Jack Kelleher, Data and Analytics Associate, Healthcare, at Cushman & Wakefield, said:
“Interest and activity in the UK care home market have skyrocketed in the last 12 months, driven in part by strong appetite from US investors.
“US funding sources have dominated the sector in 2025, reinforcing their strong and growing presence with investment across asset grades and structures. Occupancy levels remain robust due to the UK’s ageing demographic profile. Average Weekly Fees showed steady Year-on-Year growth, supporting resilient profit margins across all asset grades.
“However, Q2 cost headwinds – notably the National Insurance and National Minimum Wage increases – will impact margins across the sector. In many cases, this additional cost will be passed on, meaning residents are likely to face higher Average Weekly Fees as a result.
“Despite the lower private fee levels and profitability compared to Grade A stock, Grade B and C assets still offer appealing investment opportunities, due to the fragmented ownership and attractive pricing characterising the UK market.”
