Care Home Valuation in 2026: What Your Home Is Worth and Why

Privately funded residents in UK care homes paid an average of £1,461 a week in the year to March 2025, against £1,096 paid by local authorities, according to Knight Frank's 2025 review of more than 100,000 beds. LaingBuisson's estimate of what self-funding residents typically paid across the whole UK market in 2024-25, the figure our Market Index uses, is lower at £1,278 a week, which reflects a different sample and year. That gap of £365 a week, multiplied across every bed and every week of the year, is one of the main reasons two homes with the same number of beds can be valued years of profit apart, and it is only one of the five or six things a buyer weighs. The same market paid three times profit for some homes last year and ten times for others.

A care home is valued as a multiple of its adjusted yearly earnings. The multiple a buyer is willing to pay reflects how confident they are that the income will continue under new ownership, and they judge that from a short list of things about your home that can be read from the outside before anyone asks for your accounts.

The multiple values the trading business. Where you own the building, that means the profit left after a fair rent for it, otherwise the building would be counted twice, and we then value the building separately and add it on top. Two homes with the same profit can sit in very different buildings, from a well-kept purpose-built home to an older property that needs major work, and a single multiple cannot reflect that. Asking prices on our Market Index are quoted as advertised, and for a freehold home they usually include the building.

The same market paid three times profit for some care homes and ten times for others, and buyers decide which from a short list of things they can read from the outside.

01—The Method

How a Care Home Valuation Is Worked Out

Buyers start with earnings before interest, tax, depreciation and amortisation, usually shortened to EBITDA, which is the trading profit of the home before the costs of how it is financed and accounted for. Larger groups also look at the same figure before rent and central costs.

Across the homes in Knight Frank's 2025 review, which covers more than 100,000 beds, that figure came to 30.1% of income, with staff taking 55.3%. A buyer will set your own percentages against those.

The building is the second part of the price. A home where the owner holds the freehold can be sold with the property, sold as a trading business with a lease back to the buyer of the property, or split between two buyers, and how you hold the property also affects the tax you pay on the sale. A leasehold home is valued on its trading business alone, with the rent already in its costs, and the length and terms of the lease affect what a buyer will pay.

Buyers also check the price against the number of registered beds, so bed numbers and the condition of the rooms carry weight alongside the profit.

Private residents paid £365 a week more than local authorities on average, which is £18,980 a year for every bed filled privately.

02—The Profit

What the Profit Figure Actually Is

In an owner-run home the profit in the accounts is rarely the figure the multiple is applied to. A buyer adds back what you pay yourself and any personal or one-off costs that will not continue, then deducts what it would cost to employ someone to do your job, whether that is a registered manager, an operations lead or both.

As an example, take a home showing £320,000 of profit where the owner draws £60,000 a year and runs the home day to day. Adding back the owner's pay gives £380,000. A manager to replace the owner might cost £50,000 with employment costs, which leaves £330,000 of adjusted earnings. In the middle tier, at 5 to 7 times, that home would be valued at between £1,650,000 and £2,310,000. The same home with a Good rating, occupancy in the mid-nineties and a strong share of private residents could be discussed in the top tier, at between £2,310,000 and £3,300,000 on the same earnings.

Buyers ask for evidence of each adjustment, such as payslips and invoices. The buyer's lender will go through the same figures again, and its view decides how much the buyer can borrow.

03—The Tiers

What Moves a Care Home Between Tiers

The CQC rating comes first. A Good or Outstanding rating is close to a condition of serious interest from buyers and their lenders, and a home rated Requires Improvement sells to fewer buyers at a lower multiple.

Occupancy is next. Knight Frank put average occupancy across its sample at 88.7% in the year to March 2025. A home running in the mid-nineties with a waiting list is a different purchase from one in the low eighties, and buyers look at which way it has been moving over the last two years as closely as the figure itself.

The fee mix decides how much of the income moves with the market. Privately funded residents paid an average of £1,461 a week across the Knight Frank sample in the year to March 2025, against £1,096 from local authorities, £365 a week more, or £18,980 a year for each bed. Homes with a strong self-funded share sit in the higher tiers.

Staffing comes through in agency use and in the registered manager. A settled team with little agency cover shows a business that runs, and a change of registered manager during or just after a sale is a risk buyers price directly.

04—The Buyers

Who Is Buying Care Homes in 2026

The buyers for a single home or a small group are wider than most owners expect: regional operators building up homes in one area, investor-backed care groups, property investors who buy the building and lease it to an operator, and families growing from one home to several.

Most homes in England are still independently owned. Of the 11,655 care homes for older people on the CQC register, 5,034, or 43%, are run by an operator with a single home, and two thirds are run by operators with five homes or fewer. That is the market a buyer is choosing from.

05—The Figures

The Figures a Buyer Asks For

The figures buyers ask for are occupancy by month for the last two years, income split between private and local authority residents with the weekly rate for each, agency spend as a share of staff costs, the last two CQC reports, and how the property is held.

For a first view of where your own home sits, our valuation calculator takes a few minutes and asks the questions a buyer would.

If you are starting to think about what your home might be worth, whether that is next year or in five years, we are always happy to talk it through.

How we value and sell care homes is set out on our care home advisory page.

For current figures on how many care homes change owner each year, what they are asking and who owns them, see our Senior Residential Care Market Index, updated every quarter.