Care Home Development Finance
Care home development finance funds the construction or conversion of a registered care facility, typically to 60%–65% of gross development value or 80%–85% of total cost, at 7.5%–11% per year plus fees, drawn in arrears against a monitoring surveyor's certificates. Lenders underwrite the operator as closely as the building: an unregistered scheme with no named operator and no CQC pathway will not get terms at any price, while a scheme with a signed operating lease or an experienced in-house operator is one of the more financeable asset classes in UK development, because the exit is an investment refinance against income rather than a series of unit sales.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Loan to GDV
- Up to 65%; 60% where the operator is unproven
- Loan to cost
- 80% – 85% including 100% of build costs
- Rate
- 7.5% – 11% per year, rolled into the facility
- Loan size
- £1m – £40m; larger via club or syndicated structures
- Term
- 18 – 36 months, including a lease-up window
- Arrangement fee
- 1.5% – 2%; exit fee 1% – 1.5% of GDV or loan
- Drawdowns
- Monthly in arrears against QS certification
- Operator
- Named operator, signed lease or in-house track record
- Exit
- Investment refinance on stabilised EBITDAR, or sale
Worked example — 64-bed new-build care home
- Land cost
- £1,600,000
- Build cost (64 beds)
- £8,900,000
- Total cost with fees and contingency
- £11,200,000
- Gross development value (stabilised)
- £17,500,000
- Facility at 62% LTGDV
- £10,850,000
- Developer equity required
- ≈ £1,600,000
- Rate, rolled over 27 months
- 8.75% per year
- Rolled interest and fees
- ≈ £1,780,000
- Exit
- Investment refinance at 65% LTV once at 85% occupancy
Figures are typical UK market ranges as at 2026 and are indicative only — your terms depend on the scheme, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- Full planning permission for C2 use, or a clear route to it
- A named operator: a signed agreement for lease, or your own registered group
- A fixed-price or GMP build contract with a contractor of suitable capacity
- Developer equity of 15%–20% of total cost, in before the first drawdown
- A financial model showing stabilised EBITDAR that supports the refinance
This is the wrong product if
- Speculative sites with no operator and no CQC registration pathway
- Schemes relying on a sale to an unidentified institutional buyer at completion
- First-time developers with no healthcare or comparable build experience
- Conversions where the building cannot meet current CQC room and en-suite standards
What actually happens, and when
- Week 1
Scheme review
We stress the appraisal, the operator agreement and the stabilised income before approaching anyone — lenders in this sector decline on the operator, not the bricks.
- Week 1–2
Terms
Heads of terms from the healthcare desks that actively lend: LTGDV, rate, fees, drawdown mechanics and the covenants that will bind you at exit.
- Week 3–6
Due diligence
Valuation on both cost and stabilised investment basis, QS appraisal of the build contract, operator and covenant review.
- Week 7–10
Completion
Facility documented and the first drawdown released. Monthly drawdowns follow certification thereafter.
- Month 18–30
Exit
Once occupancy stabilises, we refinance onto an investment facility priced on income — arranged before practical completion, not after.
Frequently asked
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.