The first hint that the Competition and Markets Authority (CMA) investigation into the acquisition of hundreds of UK care homes by US Real Estate Investment Trust (REIT) Welltower may have dampened a soaring market has come in the shape of the Christie’s & Co annual market review, out today.
According to the specialist property adviser, transaction volumes fell in the first half of 2026 from the previous ‘spectacular’ highs of 2025, which saw £12bn spending in UK healthcare property overall, with US investors responsible for at least 70 per cent of those deals.
However, according to experts I’ve spoken to, that relative slowdown was very likely temporary while the market waited for the outcome of the CMA investigation, which finally came last week.
It will be interesting to see if the regulatory process was the only factor slowing comparative investment growth, or if uncertainty over future policy direction is likely to have an impact, as discussed last week.
Strong fundamentals, but challenges remain
Beyond the investment story, the Christies & Co report paints a picture of a care home sector that continues to strengthen across several fronts. Occupancy remains high, with 69 per cent of operators reporting rates above 90 per cent over the last year, while reliance on agency staff has continued to fall, pointing to greater workforce stability and improved operating performance. At the same time, more than half of operators surveyed in the report said they are looking to acquire another care home in the next 12 months, suggesting confidence in future growth remains intact despite a difficult cost environment.
Meanwhile, the development pipeline also appears buoyant, according to the report, which says the property agent expects to transact around 1,200 consented and new-to-market care home beds during 2026. Interestingly, the report confirms that expansion is increasingly spreading beyond traditional south-east hotspots into regions including the Midlands, Wales and the South West, adding that Scotland's decision to increase its care home cap from 60 to 100 beds is already stimulating developer interest.
However, it also details several constraints that could temper growth, none of which will come as a surprise to the sector. Its analysis shows local authority fee increases have slowed compared with recent years and are failing to keep pace with rising employment and National Insurance costs, while planning delays, construction cost inflation and workforce pressures continue to constrain operator expansion ambitions alongside the lowest volume of existing care homes coming to market in six years.
The underlying message from the market appears to be that demand, capital and operator ambition remain firmly in place to meet rising demand for care home places – but it now needs policymakers and regulators to work with the sector to help solve the multi-layered barriers to unlocking enough of the right supply for the future.
