Care home conversion finance
We arrange commercial finance to convert, reposition or reopen care homes. This is business and property funding for operators, buyers, investors and developers, not help with paying care fees.
Funding conversion and repositioning
Conversion and repositioning covers a range of value-add situations: converting a property to care use, modernising tired legacy stock, reopening a closed care home, or repositioning a weak home onto a stronger trading footing. These deals are about the journey from current state to a stabilised, well-rated asset.
Care home conversion finance, as we use it, is the bridging, development or refurbishment loan used to fund that journey, with a planned exit onto a term commercial mortgage once the home is converted, rated and trading. Because the asset is not yet stabilised, lenders underwrite the scheme and the credibility of the exit as much as the current value.
Lenders read these deals through the works programme, the operator's track record, the planning and registration path, and the stabilised value and earnings the finished home will support. A closed home with a clear reopening plan and an experienced operator is fundable; a speculative conversion with no operator is much harder.
We structure the short-dated funding and pre-agree the term exit so the route from purchase to stabilised home is clear, and we run the market across bridging, development and term lenders.
What we fund
- Conversions of property to care use with change of use
- Reopening of closed or mothballed care homes
- Modernisation of legacy stock to market-standard rooms
- Repositioning of weak or poorly rated homes
- Refurbishment and reconfiguration to add en-suite wetrooms
- Re-registration of homes for a new client group
Indicative terms
- Bridging LTVUp to 70 to 75% of value
- Bridging rateAround 0.75 to 1.2% per month
- Development or refurbishmentUp to 60 to 70% loan-to-cost
- Stabilised valueTerm exit sized to around 60 to 65% of stabilised value
- Term exit15 to 25 years, from around 7 to 9%
- Key testsWorks programme, operator, planning, exit credibility
- RevenueStabilised trading once converted and rated
Indicative only. Terms vary by lender, operator and home and are not an offer of finance.
How we fund care home conversion and repositioning
We fund these deals in two parts: the short-dated money that gets the home from its current state to stabilised, and the term exit that takes out the short-dated debt. For a purchase plus works we arrange bridging to around 70 to 75% of value at roughly 0.75 to 1.2% a month, or development and refurbishment finance to about 60 to 70% of loan-to-cost where the works are substantial. We pre-agree the exit onto a term commercial mortgage, sized to around 60 to 65% of stabilised value and 70 to 75% of value once trading, over 15 to 25 years from around 7 to 9%. The credibility of the works programme, the operator and the exit drive appetite, because the asset is not yet stabilised. Every figure is indicative, never an offer.
Lender appetite for conversion and repositioning
Repositioning is squarely in the territory of lenders comfortable with short-dated and value-add risk. Puma Property Finance and Ortus are active on care home bridging and refurbishment, OakNorth and Shawbrook fund larger conversions and reopenings where the operator is strong, and Assetz Capital supports owner-operator repositioning and development. Allica Bank, Paragon and Atom Bank typically come in on the term exit once the home is stabilised and rated. As a broker with no exclusive tie, we pair the short-dated lender with a credible term exit from the outset, so the deal does not stall at refinance, and we run the whole market for both legs.
The care home conversion and repositioning market
The case for repositioning is built into the stock itself. LaingBuisson reports that 44% of UK care capacity is not purpose-built and that stock replacement runs at only 1 to 2% a year, while Carterwood projects a shortfall of 221,600 to 228,600 en-suite wetroom beds by December 2024 estimates. That is a vast pool of tired stock and unmet demand for modern, en-suite rooms, which is exactly what conversion and repositioning addresses. Knight Frank reports occupancy at 88.7% for FY2024/25 and Christie & Co notes average sale prices up 7.1% across FY2025 deals, so a successfully repositioned, well-rated home re-rates strongly in value. For lenders, a credible repositioning with an experienced operator has a clear, well-evidenced exit.
Finance that suits this setting
- Care home bridging financeFunds purchase and works fast, ahead of a term refinance once stabilised.
- Care home development financeFunds substantial conversion, change of use and reconfiguration works.
- Care home refinanceThe planned term exit that takes out short-dated debt once the home is rated and trading.
- Care home purchase and investment financeAcquires the closed or weak home that the repositioning plan will turn around.
Fund a conversion and repositioning home
A view on fundability within one working day.
What drives a care home conversion or repositioning's numbers
Repositioning economics are about the journey from current state to stabilised value, so lenders underwrite the works and the exit as much as today's numbers. The opportunity is built into the stock: LaingBuisson reports 44% of UK capacity is not purpose-built with stock replacement at only 1 to 2% a year, and Carterwood projects a shortfall of 221,600 to 228,600 en-suite wetroom beds by December 2024 estimates. Knight Frank puts occupancy at 88.7% for FY2024/25, and Christie & Co notes average sale prices up 7.1% across FY2025 deals, so a successfully repositioned, well-rated home re-rates strongly. The decisive factors are the works budget and timetable, the operator, the planning and registration path, and the stabilised earnings the finished home will support.
Indicative conversion and repositioning leverage and rates
Indicatively we arrange bridging to around 70 to 75% of value at roughly 0.75 to 1.2% a month for purchase and works, or development and refurbishment finance to about 60 to 70% of loan-to-cost where the works are substantial, then a term commercial mortgage exit sized to around 60 to 65% of stabilised value and up to 70 to 75% once trading, over 15 to 25 years from around 7 to 9%. A credible works programme, an experienced operator and a pre-agreed exit earn the keener end. These are market-typical, indicative figures and never an offer; we pair the short-dated lender with a credible term exit from the outset so the deal does not stall at refinance.
Live care schemes in the planning pipeline
Recent care-related planning activity relevant to conversion and repositioning, drawn from local-authority records.
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Custard Factory, Gibb Street, Digbeth, Birmingham B9 4AA
Change of use and refurbishment of existing creative quarter buildings to provide flexible Class E commercial floorspace, studio space and F&B units
View on the planning portal → -
103 Colmore Row, Colmore Business District, Birmingham B3 3AG
Internal refurbishment and Cat A fit-out of floors 7 to 12, prime CBD office building, scheme led by Sterling Property Ventures
View on the planning portal → -
Fort Dunlop, Fort Parkway, Erdington, Birmingham B24 9FE
Refurbishment of existing office and retail accommodation at Fort Dunlop, including Class E reconfiguration and energy-efficiency upgrades
View on the planning portal → -
Aston Cross Business Village, Rocky Lane, Aston, Birmingham B6 5RQ
Change of use of existing industrial units to last-mile logistics / urban warehousing, including external loading reconfiguration
View on the planning portal → -
Jewellery Quarter, Vyse Street and Warstone Lane, Birmingham B18 6JT
Change of use of three existing light-industrial workshops to mixed Class E commercial / studio use, retaining historic frontages within the JQ conservation area
View on the planning portal → -
Brindleyplace No. 8, Brindleyplace, Birmingham B1 2HZ
Refurbishment and Cat A fit-out of vacant office accommodation at Brindleyplace No. 8, prime CBD office repositioning
View on the planning portal →
Frequently asked questions
Can I get finance to reopen a closed care home?
Yes. We arrange bridging or development finance to buy and refurbish a closed or mothballed home, with a pre-agreed term exit onto a commercial mortgage once it is re-registered, rated and trading. Lender appetite turns on the works programme, the operator's track record and the credibility of the reopening plan.
What are the red flags lenders look for in a care home conversion?
Lenders watch for an unrealistic works budget or timetable, no credible operator lined up, a weak or absent CQC track record, planning or change-of-use risk, and a thin or unproven exit. We address these up front by pre-agreeing the term exit and presenting a deliverable plan, which is what gets a repositioning funded.
How is conversion finance structured?
Usually in two legs: short-dated bridging or development finance to fund purchase and works, then a term commercial mortgage to take out that debt once the home is stabilised. We arrange both from the outset, sizing the short-dated money to around 70 to 75% of value or 60 to 70% of cost, and the term exit to the stabilised value.
Can I fund a change of use to care from another property type?
Yes, where the planning and registration path is credible. We fund conversions to care use with development or bridging finance, weighing the change-of-use risk, the works and the operator. A clear planning route and an experienced operator are what make these deals fundable.
How fast can repositioning finance be arranged?
Bridging for purchase and works can move quickly, often in a few weeks, where the property, operator and exit are clear. The term refinance follows once the home is converted, rated and trading. We pre-agree the exit so the timetable from purchase to stabilised home is realistic from day one.
Funding a conversion and repositioning home?
Tell us about the home and the operator and we will come back with a view on fundability and likely terms.