From Beds to Bids: Former Care Homes selling in the Residential Auction Sector

In recent years, a growing number of former care homes across the UK have been brought to market, reflecting wider changes in both the care and property sectors. In the last three years, Allsop’s Residential Auction team has facilitated over £25 million in transactions involving the sale of predominantly vacant former care homes, offering a window into how these properties are being re-evaluated and repurposed.

As demographic pressures, operational challenges, and policy reforms reshape how care is delivered, many older or underperforming facilities are being closed, repurposed, or sold. This shift is creating a ripple effect in the property sector, where former care homes are attracting a diverse range of buyers both from within the sector and those looking at new uses and/or redevelopment.

Why Are Care Homes Being Sold?

Several factors are contributing to the increased number of former care homes entering the market:

• Changing Care Models: The care sector is gradually moving towards more specialist, modern facilities that can meet evolving standards in accessibility, sustainability, and personalised care.
• Rising Operational Costs: Many smaller or outdated homes are no longer economically viable to operate due to staffing shortages, rising compliance costs, and increasing expectations around care quality.
• Consolidation: Larger care providers are consolidating their portfolios, often divesting from assets that don’t fit their strategic or regulatory criteria.
• Regulatory Pressure: Older homes that fall short of Care Quality Commission (CQC) standards may be decommissioned, leaving the buildings vacant and ripe for redevelopment.

What Are These Properties Becoming?

Once vacated, former care homes offer a unique proposition in the property market. Their size, location—often in residential or semi-urban areas—and existing infrastructure make them appealing for a wide range of alternative uses.

• Supported and Assisted Living: Many properties remain within the broader care sector, albeit with new operators or adapted uses. Supported housing providers are acquiring former care homes to meet the rising demand for services aimed at people with learning disabilities, mental health conditions, or elderly residents needing lower levels of care.
• Residential Redevelopment: Developers see potential in converting these properties into flats, HMOs (houses in multiple occupation), or family homes. In some cases, entire sites are cleared for new-build housing. Planning constraints, however, can vary significantly depending on local authority policies.
• Student or Key Worker Accommodation: In areas near universities or hospitals, care homes are being repurposed as student halls or key worker housing. These conversions often require extensive reconfiguration but offer the advantage of large footprints and shared amenity space.

• Land Banking and Private Extensions: Occasionally, former care homes are purchased by individuals who own adjacent properties, either for future development or to extend their own footprint.
• Community and Educational Use: Some sites are being converted into nurseries, training centres, or community hubs, especially when located in areas with high demand for social infrastructure.

Who is buying and why?

Trends and Observations

• Vacant Sales Dominate: Most transactions involve vacant properties, allowing buyers the flexibility to repurpose.
• Diverse Buyer Pool: Buyers include investors, developers, speculators, and specialist care providers, each driven by different end goals.
• Planning and Flexibility Matter: Properties with flexible use classes or existing planning consent for redevelopment tend to attract the strongest interest and achieve higher values.

• Value Add Opportunity: Properties are typically sold as is, with potential for change of use, and/or redevelopment, subject to consents.
• Auctions Play a Growing Role: Auction houses have become a popular route for disposing of former care homes, offering transparency, the certainty of the auction contract, defined timescales, and access to a broad range of bidders encouraging competitive bidding and maximising sale prices achieved.

Challenges

• Conversion Costs: The cost of adapting older care homes can be significant, especially where buildings require major structural work or compliance upgrades.
• Planning Restrictions: Not all sites are easily repurposed, and local authorities may impose constraints, especially if a building has community value.
• Community Sentiment: In some cases, there may be local resistance to certain new uses, particularly high-density residential developments or HMOs

Looking Forward

The future of former care homes in the property sector will likely be shaped by ongoing demographic change, housing demand, and government policy around care provision. As needs evolve, so too will the types of buildings and facilities required.

What’s clear is that these properties are far from redundant. Instead, they represent an opportunity—for housing, for new care models, or for entirely different uses. The challenge lies in aligning those opportunities with the needs of communities and the realities of redevelopment.