Demand for residential care is expected to increase significantly over the next decade as the UK's population continues to age.
According to Savills' UK Care Home Development Report 2026, England will require approximately 139,000 additional elderly care home beds by 2036, around a 30% increase on current capacity. To meet this demand, the number of new beds delivered each year would need to more than double.
The report highlights a growing imbalance between the number of older people requiring care and the availability of suitable accommodation. While this presents opportunities for providers and investors, it also raises important questions about how the sector will meet future demand.
The biggest driver is demographic change.
People are living longer than ever before, with many entering residential care later in life and with increasingly complex health needs. This means providers are caring for residents who require higher levels of clinical support, specialist services and personalised care.
As life expectancy increases, so too does the demand for high-quality care environments that can support these changing needs.
Although new care homes continue to be built, overall capacity has increased far more slowly than demand.
Savills reports that between 2020 and 2025, more than 30,000 new care home beds were delivered across the UK. However, almost the same number of older or unsuitable beds were removed from service during the same period.
In many cases, new developments are replacing ageing stock rather than increasing the total number of available beds.
This means demand continues to outpace supply, contributing to higher occupancy levels and increasing pressure across the sector.
The report highlights significant regional differences in development.
Around 40% of the current care home development pipeline is located in the South of England, where higher levels of self-funding residents often make new developments more commercially viable.
By comparison, areas that rely more heavily on local authority funding continue to face greater challenges attracting investment, leaving many regions with an ongoing shortage of modern care accommodation.
This uneven distribution of capacity presents both operational and strategic challenges for the sector.
There are encouraging signs that development conditions are improving.
Construction cost inflation has eased considerably from the highs seen in recent years, while lenders are showing greater confidence in supporting high-quality care developments.
Private care fees have also generally increased faster than inflation, helping improve the financial viability of new projects.
However, significant challenges remain.
Planning delays, workforce shortages, rising operational costs and increasing regulatory expectations continue to affect the pace at which new capacity can be delivered.
Growing demand presents clear opportunities, but it also increases expectations.
Today's residents often have more complex needs and expect modern, well-equipped environments that support dignity, independence and high-quality care.
To remain competitive, many providers are investing in:
The organisations that continue investing in quality, resilience and operational excellence are likely to be best placed to meet future demand.
Expanding services or increasing occupancy doesn't just create opportunities – it also changes an organisation's risk profile.
As providers grow, it's important to regularly review:
Planning for growth should involve more than increasing capacity. It should also ensure the organisation has the right protection and support in place for the future.
At Quality Care Group, we understand that supporting care providers means much more than arranging insurance.
We work alongside organisations across the sector, helping them build stronger, more resilient businesses through a range of specialist business solutions, including:
Risk management
Mock CQC inspections
Recruitment support
Energy procurement
Wealth management
Cyber security
Care home sales
As demand for care continues to grow, we're committed to helping providers navigate change with confidence and prepare for the future.
Whether you're planning to expand, reviewing your risk profile or looking to strengthen your organisation's resilience, Quality Care Group is here to help.
Speak to our team today to find out how our specialist insurance and business solutions can support your organisation's long-term success.
.jpg)
Sources
Savills, UK Care Home Development Report 2026.
Savills, Spotlight: UK Care Home Development Report – June 2026.
