93% of Healthcare Investors Look to Deploy Capital into Sector

Investment demand is set to rise in the UK healthcare market this year, with 93% of investors planning to increase their healthcare allocations, according to CBRE’s 2025 UK Healthcare Sentiment Survey*.

Investors continue to be drawn to healthcare’s strong demand dynamics, stable operational performance and robust returns, further supported by improved macroeconomic conditions. CBRE’s data shows that 96% of investors are expecting increased volumes in 2025, up from 80% in 2024.

Investors predict that the greatest demand in 2025 will be for specialist care homes. Confidence in the sub-sector has been driven by continued government investment into specialist care services and increasing demand for services across the population. Elderly care homes continue to attract investment as the needs of the ageing population increase. Age-related healthcare assets have proven resilient against economic fluctuations, offering sustainable long-term cashflows.

Operators are also optimistic, with 62% expecting to grow their portfolios over the next five years. Operational performance across sub-sectors has been improving due to fee growth and better managed staff costs, with care home staff vacancy rates down to 4.3%. However, cost pressures remain a challenge, particularly with 2025 Employer National Insurance Contributions and National Living Wage increases.

While the outlook for investment activity is positive, the development market continues to face ongoing challenges on land values, funding viability and construction costs, in addition to the slow planning approval environment. Despite this, 46% of developers are planning to take on more projects in 2025, with 76% expecting development activity to recover by the end of 2026. These challenges could create opportunities to invest in and repurpose existing buildings across a number of sectors.

The highest demand for development is expected in the North West of England, likely due to its high care home occupancy rates and extensive NHS waiting times. Developers are also increasingly focused on Scotland and Northern Ireland where a luxury segment of the care home market has emerged.

Environmental, social, and governance (ESG) credentials remain front-of-mind, highlighting shifting stakeholder expectations for sustainable buildings. According to the research, 91% of investors stated that ESG will influence their investment decisions, up from 86% in 2024, cementing the view that the healthcare industry can generate a positive ESG impact.

*The 2025 CBRE UK Healthcare Market Sentiment Survey asked over 200 investors, developers, and elderly care providers for their insights into the healthcare market. Respondents have a combined investment of over £7.8bn and over 115,000 care home beds.