How to buy a care home
Buying a care home means buying a regulated trading business as well as a property. This guide walks through the process from search to completion, what it costs and how the finance is arranged.
To buy a care home you find a suitable trading home, agree heads of terms, carry out commercial and clinical due diligence, obtain a specialist going-concern valuation, arrange a commercial mortgage of typically 70 to 75% of value, register with the Care Quality Commission as the new provider, and complete. Most buyers need a deposit of 25 to 30% plus fees and working capital. It can be a sound long-term investment when the home is well rated, well occupied and well staffed, but it is an operating business that carries regulatory and staffing risk, not a passive asset.
At a glance
- Typical deposit25 to 30% of value
- Typical mortgageUp to 70 to 75% LTV
- Term15 to 25 years
- Indicative rateAbout 7 to 9%
- Regulator (England)Care Quality Commission
- Time to completeOften 4 to 9 months
What you are actually buying
A care home is a regulated trading business attached to a specialist property. When you buy one you are buying the earnings of that business, the property it operates from and the goodwill of an established, registered home. This is why lenders and valuers look first at how the home trades, not only at the building. It is also why the purchase is more involved than a standard commercial property deal.
This guide covers buying a care home as a business. It is not about families paying for a relative's care. If you are looking at acquiring, developing or refinancing a home, read on.
The buying process, step by step
- Set your strategy and budget. Decide whether you want a single home or a group, residential or nursing, and what region. Agree how much equity you can put in and what you need to borrow.
- Find a home. Specialist agents such as Christie & Co and DC Care, plus marketplaces, list trading homes and closed homes. Closed or underperforming homes are repositioning opportunities but carry more risk.
- Make an offer and agree heads of terms. These set price, what is included (shares or assets, property, fixtures, goodwill) and an exclusivity period.
- Commission a specialist valuation. A healthcare valuer assesses the home on a going-concern basis using its sustainable earnings, which underpins both your price and the lender's offer.
- Carry out due diligence. Review CQC history, occupancy, fee mix, staffing and agency use, accounts, contracts, the property and any local-authority dependence.
- Arrange finance. We approach lenders that understand care, agree indicative terms, then move to a full credit application and a lender valuation.
- Apply to register with the CQC. The new legal entity must be registered as the provider, with a fit and proper registered manager and nominated individual in place.
- Exchange and complete. Funds draw down, ownership transfers, and you take over as the registered operator on completion or shortly after, depending on how registration is timed.
A care home registration cannot simply be handed over. The incoming provider applies for its own registration, and timing this against completion is one of the trickier parts of a care home purchase. Plan it early with your solicitor and the CQC.
How much money you need
The headline figure is the deposit. On a going-concern purchase lenders typically fund up to 70 to 75% of value, so you should plan for a deposit of 25 to 30%. On top of that you need money for fees and a working-capital buffer for the first months of ownership.
| Cost | Indicative level |
|---|---|
| Deposit | 25 to 30% of price |
| Lender arrangement fee | About 1 to 2% of the loan |
| Valuation fee | Specialist healthcare valuation, often several thousand pounds |
| Legal fees | Both sides, plus CQC and property searches |
| Working capital | Payroll and running costs for the early months |
There is no single national price for a care home. Christie & Co reported a transacted range from about 30,000 pounds per bed for legacy stock to about 360,000 pounds per bed for prime purpose-built homes in 2024 deals, and average prices paid rose 7.1% year on year across its deals in FY2025.
Qualifications and who can own a home
You do not personally need a clinical qualification to own a care home, but the home must have a registered manager who meets the CQC's competence requirements, and the provider must satisfy fit and proper person tests. Lenders strongly prefer buyers who pair capital with sector experience, either their own or through an experienced management team. First-time buyers can and do succeed, usually by retaining or recruiting a strong manager and accepting slightly tighter finance terms.
- A registered manager who meets CQC requirements for the regulated activity
- A nominated individual and a fit and proper provider entity
- Evidence of how the home will be run, staffed and funded
- For nursing homes, appropriate clinical leadership and registered nurses
First-time buyer or experienced operator
Experienced operators with a track record and a clean CQC history generally secure higher leverage and keener pricing because they reduce the lender's perceived risk. First-time buyers are not shut out, but they should expect more questions on management, a larger equity contribution and closer scrutiny of the home's trading. We position both types of buyer to the lenders that suit them, including Shawbrook, OakNorth, Allica Bank and Atom Bank.
How to buy a care home: common questions
Is buying a care home a good investment?
It can be a strong long-term investment when the home is well rated, well occupied and well staffed, because demand is supported by an ageing population. The over-85 population is projected by the ONS to nearly double from 1.7 million to 3.3 million between 2022 and 2047. But a care home is an operating business with regulatory, staffing and funding risk, so returns depend heavily on how well it is run.
How much money do I need to open or buy a care home?
For an acquisition, plan for a deposit of 25 to 30% of the value, plus arrangement, valuation and legal fees and a working-capital buffer. The borrowing covers the rest, typically up to 70 to 75% of going-concern value.
What qualifications do you need to own a care home?
The owner does not need a clinical qualification, but the home must have a CQC-registered manager who meets competence requirements, a nominated individual, and a provider entity that passes fit and proper person tests. Nursing homes also need appropriate clinical leadership.
How long does it take to buy a care home?
From offer to completion it commonly takes four to nine months. The main variables are due diligence, the lender's credit process and valuation, and the timing of the new provider's CQC registration.
Can I buy a closed care home?
Yes. A closed or mothballed home can be cheaper but is a repositioning project: you are buying property and potential rather than current earnings, so it is usually funded with bridging or development finance and refinanced onto a term mortgage once it is trading and rated.
Funding a care home?
Send us the home and the operator and we will come back with a view on fundability and likely terms within one working day.