Funding to buy a trading care home, or to add to an existing portfolio.
What you are buying
A care home acquisition combines a property, a trading business and a regulatory registration. All three need funding attention and all three can derail a transaction independently.
The property and the business are usually valued together on a going concern basis where the home is trading well, and separately where it is not. See care home commercial mortgages for why that distinction drives the deposit.
Available funding
- Up to 75% LTV on market value for experienced operators acquiring owner-occupied elderly care, over terms to 25 years
- From around £150,000 for a single home, with larger and portfolio transactions handled by specialist healthcare lending teams
- Commonly around £1m to £10m from development and specialist funders where works are involved
- Supported and assisted living acquisitions assessed differently again, typically at a lower loan-to-value and often on long interest-only terms where the property is let to a care provider
The commercial mortgage calculator gives an indicative repayment on the property element.
The regulatory transfer
This is where care home acquisitions differ most from other healthcare deals. The registration does not simply transfer with the sale. A new provider registration, or a variation, has to be secured, and the timing rarely aligns neatly with the funding.
Lenders know this and will want to understand the plan. Where completion is conditional on registration, that needs building into the funding structure rather than discovered at the last minute. Bridging into a term facility is sometimes the answer where timing cannot be reconciled.
Registered manager arrangements matter too. A home acquired without a registered manager in place is a materially weaker proposition. Our guide to healthcare regulator registration covers the process across the four UK nations.
What lenders assess
- Occupancy history and trend, monthly rather than annual
- Fee rates and the split between local authority and private funding
- Full inspection history for the home, and yours as an operator
- Staffing ratios and agency dependency
- Your management experience and existing portfolio, if any
- Condition of the property and any deferred maintenance or compliance works
- The registration transfer plan
First-time operators
Harder, but a well-prepared first-time operator with relevant management experience is fundable. What lenders want to see is that you understand the operational and regulatory realities rather than the investment case alone.
Expect a larger contribution than an established group, and expect the registered manager arrangements to be scrutinised closely. Buying a well-rated home with a stable management team in place is a far easier first acquisition than a turnaround.
Turnarounds
A home with a poor rating and low occupancy can be an opportunity, and it is a different funding proposition entirely. Expect bricks and mortar valuation, a much larger contribution, and lenders wanting evidence you have turned a home around before.
It is achievable, but not as a first acquisition and not without a credible operational plan.
Common questions
How long does a care home acquisition take?
Longer than most healthcare transactions, because the regulatory registration sits alongside the conveyancing and neither can be rushed. Plan for months rather than weeks.
Can I buy a closed home?
Yes, but as a development or bridging proposition rather than a term mortgage, with the exit being a term facility once trading and registered. See development finance.
Do I need to own the property?
No. Leasehold care home acquisitions happen, though the lease terms then become central to the assessment and the funding available is generally lower.
Can I use equity in my home for the deposit?
Many buyers do, but borrowing secured on your own home is a regulated residential mortgage. We do not arrange it; you would need an FCA-authorised mortgage adviser for that part. We can then structure the care home funding around it.
All figures are indicative and subject to lender assessment, your circumstances, valuation and prevailing market conditions. Commercial mortgages and unregulated bridging loans are not regulated by the Financial Conduct Authority. Property offered as security may be at risk if you do not keep up repayments.