Knight Frank's Healthcare Development Opportunities Report 2026 shows the net supply of UK care beds grew by 136 over the past year to 480,000, with a 24% year-on-year uptick in new home completions offset by supply leakage and the rising deregistration of older stock.

Julian Evans, global head of healthcare at Knight Frank, commented: ‘Despite a record year for UK healthcare investment in 2025, Knight Frank's analysis demonstrates that supply is failing to keep pace with demand. Without a significant acceleration in both investment and development to upgrade standing stock and deliver new beds in core markets, the UK is fast approaching a crisis in care provision, with domestic bed capacity projected to reach saturation by the end of the decade.'

The report shows care home bed supply across the UK is also in urgent need of upgrading, with 79% of homes are more than 20 years old, rendering many as functionally obsolete. Over a third (38%) of homes have been converted from other uses, meaning they are often not meeting modern expectations, particularly with respect to resident wellbeing and the provision of ensuite facilities.

Quality concerns further underscore the challenge, with almost one in five (19%) UK care homes currently rated by the Care Quality Commission as requires Improvement or inadequate'.

Knight Frank has created a Development Hotspots Index that identifies South Glamorgan in Wales, Lothian in Scotland and Berkshire in England as the areas with the strongest care home development prospects. Bedfordshire, Wiltshire and Greater Manchester also score highly.