Residential care home finance
We arrange commercial finance for operators, buyers and investors acquiring, refinancing or building elderly residential care homes. This is business lending against a trading care home, not help with paying care fees.
Funding elderly residential care
Elderly residential care, sometimes called personal care, covers homes registered to support older people with daily living rather than full nursing. It is the largest single slice of the UK care market and the most familiar asset class to lenders, which makes it the most competitively funded setting we work in.
When we say residential care home finance we mean a commercial mortgage, development facility or going-concern loan used to buy, build or refinance the home as a trading business. The credit decision turns on the operator covenant, the CQC rating, occupancy and the fee mix between private self-funders and local-authority placements, not on a borrower's personal income.
Lenders read residential homes through their trading accounts. A stabilised home with strong occupancy, a Good or Outstanding CQC rating and a healthy private-pay share will attract keener leverage and pricing than a tired, legacy property carrying local-authority-only income and a weak rating.
We package the operator story, the property and the numbers so that healthcare-experienced lenders can price the risk quickly, and we run the market rather than approaching a single bank.
What we fund
- Purpose-built modern residential homes with en-suite wetrooms
- Converted period properties registered for personal care
- Small owner-operated homes of 20 to 40 beds
- Mid-market regional homes of 40 to 80 beds
- Dual-registered residential and nursing homes
- Legacy stock being upgraded to market-standard rooms
Indicative terms
- Commercial mortgage LTVUp to 70 to 75% of value
- Going-concern basisTo around 70% of going-concern value
- Term15 to 25 years
- Indicative rateFrom around 7 to 9%
- DevelopmentUp to 60 to 70% loan-to-cost
- Key testsOperator covenant, CQC rating, occupancy, fee mix
- RepaymentCapital and interest or part interest only
Indicative only. Terms vary by lender, operator and home and are not an offer of finance.
How we fund elderly residential care
We fund residential homes on their trading performance. For an acquisition or refinance we model the maintainable EBITDARM, test it against the operator covenant and the CQC rating, and place the request with healthcare-experienced lenders on a commercial mortgage to around 70 to 75% of value, typically over 15 to 25 years. Where a buyer is taking on a trading home we lend on a going-concern basis, sizing the loan against the going-concern value rather than bricks and mortar alone. For new schemes we arrange development finance up to roughly 60 to 70% of loan-to-cost, with the exit on a stabilised commercial mortgage once occupancy matures. We frame every figure as indicative and never as an offer; the terms a given home attracts depend on its accounts, rating and location.
Lender appetite for residential care homes
Residential care is the most widely banked care setting, so appetite is deep. Shawbrook and OakNorth both run dedicated healthcare teams that lend on trading residential homes and small portfolios. Assetz Capital and Allica Bank are active on owner-operator and mid-market residential acquisitions, while Atom Bank and Paragon support commercial mortgages on well-rated stock. Puma Property Finance and Ortus appear more on development and shorter-dated repositioning work. We are a broker with no exclusive tie to any of them, so we match the home and the operator to the lender most likely to price it keenly rather than steering every case to one bank.
The elderly residential care market
The fundamentals behind residential lending are strong. Knight Frank reports mature private and corporate home occupancy at 88.7% for FY2024/25, near the pre-COVID trend, and weekly fees across all care averaging £1,298, up 9.8% year on year. Carterwood puts self-funder personal and residential fees at £1,302 a week as of September 2025, up 8.5%. The ONS projects the over-85 population to nearly double from 1.7m to 3.3m between 2022 and 2047, and LaingBuisson notes that 44% of UK capacity is not purpose-built with stock replacement running at only 1 to 2% a year. That combination of rising demand, ageing stock and steady occupancy is what gives lenders confidence in a well-run residential home as both an income asset and a future exit.
Finance that suits this setting
- Care home purchase and investment financeThe core route for acquiring a trading residential home or adding to a portfolio.
- Going-concern and operator financeLends on the trading business and EBITDARM where a buyer takes on an operating home.
- Owner-occupier care home mortgageSuits hands-on operators running the home from their own balance sheet.
- Care home refinanceReleases equity or re-prices debt once a residential home is stabilised and well rated.
Fund a elderly residential care home
A view on fundability within one working day.
What drives a residential care home's numbers
A residential home's value to a lender comes down to maintainable EBITDARM, occupancy and fee mix. Knight Frank reports all-care occupancy at 88.7% for FY2024/25 and personal or residential fees averaging £1,153 a week, with private at £1,346 and local authority at £1,018. Carterwood puts self-funder residential fees at £1,302 a week as of September 2025, up 8.5%. The biggest swing factor is staffing: Knight Frank records staff costs at 55.3% of income, around £37,877 per resident. A home that fills well, holds a healthy self-funder share and controls payroll converts those fees into the margin that supports borrowing. We model the maintainable earnings, not a single strong month, because that is what lenders lend against.
Indicative residential care home leverage and rates
Indicatively we arrange residential commercial mortgages to around 70 to 75% of value, or going-concern lending to roughly 70% of going-concern value, over 15 to 25 years, with pricing from around 7 to 9% depending on covenant, CQC rating and occupancy. A Good or Outstanding rating with strong self-funder income earns the keener end; weaker accounts or ratings pull leverage and price back. Development for new residential schemes runs to about 60 to 70% of loan-to-cost. These are market-typical figures, framed as indicative and never as an offer; the actual terms a home attracts depend on its accounts, rating and location, and we run the market to find them.
Frequently asked questions
How much deposit do I need to buy a residential care home?
On a going-concern acquisition we typically arrange lending to around 70 to 75% of value, so a deposit of 25 to 30% is a realistic working assumption. The exact figure depends on the operator covenant, the CQC rating, occupancy and the strength of the trading accounts. We size each case individually and present the leverage as indicative, not an offer.
Can I get a commercial mortgage on a residential care home?
Yes. A commercial mortgage is the standard route for buying or refinancing a trading residential home. Healthcare-experienced lenders such as Shawbrook, OakNorth and Allica Bank lend to around 70 to 75% of value over 15 to 25 years, pricing against the home's trading performance, rating and occupancy rather than personal income.
Does my CQC rating affect the finance I can raise?
Strongly. The CQC rating is one of the first things a lender checks. A Good or Outstanding rating supports keener leverage and pricing, while a Requires Improvement or Inadequate rating narrows appetite and may push a case toward shorter-dated or repositioning finance until the rating recovers.
What is the difference between residential and nursing home finance?
Both are funded on trading performance, but nursing homes carry registered-nurse staffing, higher fees and tighter margins, so lenders scrutinise staffing cost and agency reliance more closely. Residential homes are simpler to fund and more widely banked. We treat dual-registered homes case by case.
Can finance fund upgrades to an older residential home?
Yes. Where a home needs reconfiguration to add en-suite wetrooms or modernise rooms, we can arrange refinance with a capital-expenditure facility, or bridging where the works are time-critical, with the exit onto a term commercial mortgage once the upgraded home is stabilised.
Funding a elderly residential care home?
Tell us about the home and the operator and we will come back with a view on fundability and likely terms.