Elderly care
Q1 2026 has set a steady foundation for the year in the elderly care sector. While deal volumes have not reached the highs recorded in the same period of 2025, overall market sentiment has been notably positive. Activity has remained healthy, with multiple transactions completing, progressing under offer, or coming to market across the elderly care space.
With Q1 of 2026 already behind us, the elderly care market stands at a pivotal moment, shaped by demographic inevitability, constrained supply, and increasingly strategic investor behaviour. Although transaction volumes are expected to slow slightly, this reflects an acute shortage of quality stock rather than weakening demand, particularly following a year in which large international buyers such as Welltower and Omega absorbed a significant share of available assets. The market remains highly appealing to capital, supported by the continued draw of ESG‑aligned, inflation‑linked long‑income lease structures and the growing presence of first‑time buyers. Demand for care also appears as inelastic as ever; despite necessary fee increases to offset rising operating costs, occupancy has held firm at 88%–90% over the last two years, reinforcing expectations that this stability will continue throughout 2026.
This year has already opened with signs of strong momentum. Parklands’ investment of more than £13 million into a new 60 bed home in Turriff and Hartford Care’s acquisition of 16 operational homes from Select Healthcare Group demonstrate that well capitalised operators are not waiting for conditions to shift, they are expanding early and decisively. These moves reflect a broader trend in which buyers seek scale and operational depth at a time when building new capacity remains slow, costly, and complex.
This pressure on capacity is also driving a renewed reliance on management contracts which are set to become increasingly important for both operators and investors as they offer a flexible, lower risk avenue to expansion and operational control. The momentum seen last year from large U.S. REITs, particularly Welltower and Omega, showcased how management contracts can accelerate consolidation without requiring heavy upfront capital deployment. In an environment where operators face intense staffing, compliance, and financing headwinds, these structures allow investors to gain exposure to income generating assets while leaving day to day operations to experienced management partners.
Alongside this, OpCo activity is rising. Several operational platforms are already being marketed, offering buyers immediate scale, built-out management infrastructure, and immediate revenue. This trend is bolstered by demographics, with the over 65 population in the UK estimated at 13.6 million in 2026 and expected to reach 16.8 million by 2040. OpCo platforms therefore offer not only existing income, but structural growth built into the demographic trajectory of the country. In a supply constrained sector, acquiring operational platforms is increasingly becoming the fastest and most effective way to expand.
Figure 1: Long-term demand for elderly care (1990-2024) with projections to 2034, highlighting the demographic pressures underpinning 2026 market behaviour (LaingBuisson, 2025).
We had started to see development challenges ease, albeit that has now reversed as a result of the War in Iran. However, strong demand and robust operator performance continues to improve and will drive selective newbuild activity, especially in high demand regions.
The UK market is also attracting renewed attention from international buyers. Investors from the U.S., Asia, and Europe are drawn to the combination of fragmentation, demographic strength, and the opportunity to professionalise operations at scale. The U.S. is expected to account for a significant share of this year’s transactions, continuing a trend that has shaped the sector over the past 18 months.
On the capital side, insurance based investors remain keen, particularly through refinancing, while specialist healthcare investors continue to dominate new investment activity. Institutional capital, which had pulled back during the high rate environment, are attracted to the long term defensive characteristics of elderly care.
Perhaps one of the most important dynamics shaping 2026 will be the growing role of banks and ManCo funders in driving M&A. With operators under pressure and significant “dry powder” waiting to be deployed, it is these groups, rather than traditional real estate only funders, who are expected to propel consolidation. Banks want to de risk their exposure by supporting stronger, more scaled borrowers, while ManCo funders recognise that platform acquisitions are the most efficient way to capture growth and operational synergies in a market where building new stock cannot keep pace with rising demand.
We expect to see the market characterised not by rapid transaction volume growth, but by strategic, quality focused, and scale oriented activity. With a constrained supply of assets, deep demographic tailwinds, and increasingly sophisticated capital pushing for consolidation, the year ahead promises gradual but meaningful structural reshaping, where long term opportunity, rather than short term momentum, defines the trajectory of the elderly care market.
Seniors Housing
2026 has already seen a noticeable uplift in activity across the seniors housing sector. Established operators are returning to the market with renewed appetite, actively seeking to expand their portfolios, while a growing number of new entrants are looking to gain exposure by partnering with experienced, long-term strategic operators. This renewed engagement reflects improving sentiment following a period of caution and signals a more confident start to the year.
The UK seniors housing market enters 2026 with clear momentum, underpinned by a widening structural gap between a rapidly ageing population and the delivery of age-appropriate homes. With 19.5% of the population already aged 65+, a figure expected to rise to 22.5% by 2040, demographic pressure continues to intensify, driving demand well ahead of supply. As a result, overall market activity is expected to surpass last year’s levels, with operators, developers, and investors re-engaging as construction inflation eases and financing conditions improve. While the sector remains relatively nascent and development-led, improving viability across pipeline projects, combined with chronic undersupply, is sustaining high occupancy levels and supporting strong operational performance.
Figure 1: UK older population growth rates, 2000-2023 actuals, and 2024-2040 projections (LaingBuisson, 2025).
A notable feature of 2026 will be the presence of new operators, seeking long term strategic partners. The market remains fragmented, with relatively few scaled players despite growing need. New entrants see this year as a window to secure both development and standing asset opportunities, recognising that early scale will be crucial as the sector prepares to serve a rising population of retirees.
Figure 2: Projected household volumes, age of head of household, mid-2018 and mid-2043 (LaingBuisson, 2025).
This shift in projected household volumes above highlights the escalating need for purpose-built seniors housing as the oldest households become the fastest growing segment of the population.
Established operators are reactivating site‑acquisition strategies. A subdued 2023–2025 period, held back by rising construction costs and higher interest rates, created a backlog of projects, and as conditions stabilise, competition for well‑located sites capable of supporting integrated, service‑led communities has intensified. With barriers to entry remaining high, turnkey acquisitions have become an efficient route to scale, prompting several seniors‑housing platforms to pursue buy‑and‑build strategies. This renewed activity reflects a wider belief that seniors housing is reaching a turning point, shaped by long standing unmet demand and an ageing curve that is accelerating rather than plateauing.
Persistent undersupply will continue to influence investment behaviour. Good occupancy across fit for purpose schemes highlights both strong demand and limited alternatives for the elderly. This reinforces the sector’s appeal to investors seeking resilient, defensive cashflows and may spur more forward funding transactions as institutions look to secure long dated income earlier in the development process.
Policy changes are adding further momentum. The £50 million boost to the Disabled Facilities Grant for 2025–26, supporting around 5,000 additional home adaptations and raising total annual funding to £761 million, offers short term relief by enabling safer independent living for older people. Although temporary, it underscores the growing pressure on existing housing stock and the need for more purpose-built seniors’ accommodation.
Tenure models in seniors housing are evolving rapidly, with the sector having traditionally been predominately a for sale model, there is a notable shift towards rental led and mixed tenure communities. This shift is expected to accelerate through 2026 as operators respond to affordability pressures and the growing preference for choice of tenure among the elderly.
As these models gain traction, the mid market is emerging as the most significant growth opportunity. In recent years, much of the private UK’s seniors housing provision has targeted more affluent locations, creating a void for more affordable homes. The transition towards more flexible rental and mixed tenure models is therefore aligning naturally with operators’ and investors’ increasing focus on mid-market, and the depth of market this represents. Delivering at scale will require strong strategic partnerships between developers, operators and investors alike.
Overall, the UK enters 2026 with a seniors housing sector that is more active, confident, and strategically focused. The fundamentals remain unchanged, with a rapidly ageing population, a significant shortfall in suitable housing, and increasing appetite from operators and investors to participate in the market.
