Savills: UK needs 139,000 new care home beds
Development will need to more than double over the next decade as demographic pressures outpace supply.
9 July 2026
The UK's senior living sector has entered a new phase of demand-driven growth, but the development pipeline remains well short of what is needed to meet rapidly increasing demand for care home accommodation.
New research from Savills forecasts that an additional 139,000 care home beds will be required over the next decade, equivalent to almost 30% of the UK's existing care home capacity.
The report concludes that delivery rates will need to more than double if the sector is to keep pace with demographic change and avoid a widening gap between supply and demand.
After two decades of largely static provision, the market is now being driven by a growing elderly population, with occupancy levels having risen above pre-pandemic levels to 87%.
However, despite around 30,000 new care home beds being delivered between 2020 and 2025, almost the same number of obsolete beds were removed from the market over the same period, leaving overall supply virtually unchanged.
Savills argues that the sector is now entering a fundamentally different phase, where future development will need to create genuinely additional capacity rather than simply replacing outdated stock.
The current pipeline comprises approximately 20,200 beds either under construction or with detailed planning consent, providing what the report describes as a solid short-term foundation. However, significantly greater levels of development will be required if long-term demand is to be met.
The research also highlights an uneven pattern of delivery across the country. Southern England has accounted for more than one-third of completions over the past five years and currently contains around 40% of the national development pipeline, reflecting stronger market fundamentals in private-pay locations.
By contrast, many areas that rely more heavily on local authority-funded care continue to experience limited investment, despite often having some of the greatest unmet demand.
While development conditions are improving, the report identifies planning delays, contractor availability and viability challenges as continuing barriers to expanding supply.
Construction cost inflation has eased considerably from the peaks experienced in 2022, while lender appetite has strengthened, creating a more positive backdrop for future development. Nevertheless, Savills warns that these improvements alone will not be sufficient unless new schemes come forward across a broader range of locations.
The report concludes that the market's long-term fundamentals remain increasingly attractive, with demographic demand providing a strong platform for investment. However, without a significant increase in development activity beyond today's pipeline, future care home provision is likely to remain constrained, leaving many parts of the UK facing growing shortages of specialist accommodation for an ageing population.
