Investment demand is set to rise in the UK healthcare market this year as 93% of investors plan to increase their healthcare allocations, according to CBRE’s 2025 UK Healthcare Sentiment Survey.

This figure is up from 80% in 2024, amid improved macroeconomic conditions, CBRE said. Investors are drawn to healthcare due to strong demand, stable operational performance and robust returns, the firm added.

Respondents to the survey predicted that the greatest demand in 2025 will be for specialist care homes, with confidence in the sub-sector driven by government investment into specialist care services and increasing demand for services.

Elderly care homes continue to attract investment as the needs of the ageing population increase, the survey found. Age-related healthcare assets have proven resilient against economic fluctuations, offering sustainable, long-term cashflows, according to CBRE.

Meanwhile, 62% of operators expect to grow their portfolios over the next five years, which CBRE said indicates optimism.

Operational performance across different healthcare sub-sectors has been improving due to fee growth and better managed staff costs, with care home staff vacancy rates down to 4.3%, CBRE found.

However, it reported that cost pressures remain a challenge, particularly following increases to Employer National Insurance Contributions and the National Living Wage announced in the Budget.

The survey also showed that 46% of developer respondents plan to take on more healthcare projects this year, with 76% expecting development activity to recover by the end of 2026.

The highest demand for development is expected in the North West of England, which CBRE said was likely to be due to the region’s high care home occupancy rates and extensive NHS waiting times.

Sarah Livingston, CBRE’s head of UK healthcare sector, said: “The results of our survey highlight healthcare as a resilient asset class, with strong demand dynamics and stable operational performance. With macroeconomic conditions improving, we expect to see a surge in investment volumes throughout the year.”

Paddy Brice, head of healthcare investment at CBRE, added: “The demand for health services is growing, creating an opportune moment for investors and developers alike. The specialist care home sub-sector has emerged as a key area of focus, and we expect to see this trend continue.”