Savills expects the UK to remain Europe’s most attractive care home real estate market in 2026, supported by a resilient private segment, strong demand, and limited new supply entering the sector.
Care home investment volumes last year were fuelled mainly by US REITs, supported by their lower cost of capital and ability to use RIDEA (management contract) structures.
US REIT Welltower alone deployed over £7bn in the sector, according to Savills, including one of the largest care home transactions, with its acquisition of Barchester Healthcare for £5.2bn.
More than £12bn of capital was deployed into UK healthcare real estate in 2025, the highest annual total on record. The advisor said investor demand extended across the full spectrum of healthcare last year, from curative care to care homes.
In the care home sector improving operational performance, including higher occupancy and stronger profitability, is increasingly supporting development viability, particularly in prime markets. Average quoted weekly fees for personal care reached £1,302 in Q3 2025 (up 8.5% year on year), while nursing care costs averaged £1,696 (up 8.3%).
‘The UK remains the primary focus for US capital and we also expect UK domiciled healthcare REITs to become more active as macroeconomic conditions improve. The scale and speed of US REIT deployment in 2025 has cemented the UK’s position as the leading destination for cross border capital in the care home sector, and we anticipate strong competition for high quality assets and portfolios again in 2026,’ said Caryn Donahue, head of healthcare and senior housing at Savills.
Tom Atherton, strategy and market intelligence manager at Savills, added: ‘We are seeing growing interest and opportunity across the healthcare spectrum. Care homes, hospitals, and primary care assets all present compelling investment prospects for 2026, driven by strong demand for services and continued constraints on new supply.’
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