Care homes have been the busiest subsector within UK healthcare M&A in recent times. Health and social care accounted for close to half of all UK healthcare deal volume in 2025, and care homes alone logged the highest transaction count of any subsector within consumer healthcare services, with over £12 billion deployed into UK healthcare real estate (the highest figure on record). H1 2026 has been quieter by comparison; Savills describes it as a period of recalibration, with a growing pipeline of care home and specialist care assets already in-market or under offer pointing to stronger volumes in H2. More than half of care operators say they are actively looking to buy or sell in 2026.
The very largest deals have had a quieter few months, after the Competition and Markets Authority opened an investigation into one major platform's rapid run of acquisitions and is considering whether disposals are needed in a number of local markets. Below that tier, the market has kept moving. Smaller and mid-market deal activity, bolt-on acquisitions, and first-time buyers entering the sector have all continued largely undisturbed.
M&A activity in care homes continues to be driven by structural factors; demand is driven by an ever increasing ageing population, with supply of modern stock being constrained as new-build completions run behind what the growing demand requires. The market remains highly fragmented, with a long tail of independent and family-owned operators. Income from private-pay residents has proved more resilient compared to income tied to local authority fee rates, which makes well-positioned homes an attractive, defensively-minded asset for a wide range of buyers.
Appetite to acquire varies significantly by scale. At one end, well-capitalised platforms continue to acquire in bulk, often backed by real estate investors for whom the property itself (not just the operating business) is the attraction. At the other end, specialist operators are growing steadily through smaller, targeted bolt-ons: a handful of homes in a particular region or a particular niche, rather than a large portfolio in one move. A first-time buyer segment has also emerged, as operators previously priced out of larger portfolios find opportunities in single homes or very small groups, particularly as some not-for-profit providers rationalise their own portfolios and bring assets to market. Some of these will then look to scale through a buy-and-build programme.
The type of care also matters as much as scale. Generalist residential and nursing care has plenty of buyers, but specialist and complex care, dementia care and supported living for people with learning disabilities or acquired brain injuries have consistently attracted the strongest interest and commanded the higher end of achievable multiples.
Despite sustained deal volumes in this sector, buyers are being increasingly selective about the businesses they look to acquire, undertaking diligence earlier and across a wider range of areas. A strong CQC rating is not just a compliance box to tick; homes with higher ratings attract a materially higher proportion of self-funding residents, which improves both margin and income resilience. Buyers are looking closely at the funding mix behind revenue (self-pay versus local authority placements), given this determines a care home's exposure to public sector fee pressure. And with the National Living Wage having risen again this year, employer National Insurance costs up, and new overseas hiring for care workers closed since July 2025, workforce stability, staffing model, and reliance on agency cover have become first-order diligence questions rather than something to check in passing.
Put together, this points to a market with real structural tailwinds but a rising bar for what counts as an attractive, sellable asset. Christie & Co's data for 2025 showed the number of care homes coming to market falling by around 15%, even as demand held up and average prices rose; on the face of it, this sounds like good news for owners who are genuinely ready to transact. However being fully prepared for a sale means the same things it means in any transaction: financial and operational data that can withstand proper scrutiny, a clear and evidenced account of specialism and positioning, and a funding and staffing profile that a buyer can trust. The deeper, more thorough diligence now standard across UK M&A applies just as much here, and the operators who have done that groundwork are the ones best placed to capture it.