- Care home investment surged 226 per cent year on year in 2025.
- US investors accounted for nearly 89 per cent of deal volumes.
- Mid-market portfolios are expected to drive activity through 2026.
Investment activity in the UK care home sector climbed to a record level in 2025, driven largely by major acquisitions completed in the final months of the year, new data has shown.
Deals worth £10.25bn were completed over the year, up from £3.1bn in 2024, according to figures from Cushman & Wakefield. The increase represents a 226 per cent jump in transaction value.
Much of the surge came in the fourth quarter, when £7.98bn worth of deals were completed. This spike was mainly linked to Welltower’s acquisitions of Barchester Healthcare and HC-One, which together accounted for around £6.4bn of activity.
A market reshaped by US capital
The data points to a sharp rise in US investor involvement. US-based buyers made up 88.6 per cent of total transaction volumes in 2025, up from 54.9 per cent in 2024 and just 10 per cent in 2023.
Peter Farnes, partner for healthcare markets at Cushman & Wakefield, reportedly said 2025 marked a “transformational” year for the sector. As quoted in a news report, he said the scale and speed of US capital deployment, particularly in the final quarter, had “fundamentally reshaped the investment landscape” and set a new benchmark for deal activity.
While the headline figures were driven by a small number of large transactions, Farnes reportedly said underlying deal flow remained broad-based, with continued demand for mid-sized portfolios across different asset qualities.
Looking ahead, transaction volumes are not expected to repeat another record-breaking year, according to the firm’s assessment. Instead, investment is likely to be supported by mid-market deals, platform consolidation and assets with strong operational performance.
Cost pressures remain a factor. Farnes reportedly said increases in the National Living Wage and employer National Insurance contributions would continue to be closely watched, particularly for older care homes with lower fee structures, though operators appeared positioned to manage these challenges.
The sector’s longer-term appeal is underpinned by demographic trends. An ageing population is driving sustained demand for elderly care and suitable accommodation, while increased policy attention on improving care provision is seen as adding to the sector’s resilience.
Farnes reportedly said the high-profile deals completed in 2025 had raised the UK care home sector’s international profile, with a strong pipeline of potential transactions suggesting investment activity would remain steady through 2026.
