How to appraise a care home development site

A care home site cannot be appraised the way a housing plot is. There is no row of recent sold prices next door to price it from; instead you have to prove that a defined local catchment holds enough older people, poorly served by the beds already open, to keep a new home full for decades. Every care site turns on four questions, and all four can be answered before you commission a single feasibility study, from two public datasets: the CQC register of every operating home, and ONS population data.

The four questions a care site turns on

Strip away the noise and a care home appraisal is four linked questions, taken in order:

1. Demand: who needs beds in this catchment now, and how many more will need them by 2043?
2. Supply: how many registered beds already serve that same catchment?
3. The gap: is the area undersupplied or oversupplied once you set supply against demand at the national rate?
4. Land value: given the beds the gap will support, what is the site actually worth?

Answer them in that sequence and the land bid falls out of the evidence rather than out of optimism. Threshold Care runs the whole chain from a single map pin; the sections below explain what sits behind each answer so you can read it, challenge it and defend it to a lender.

Question one: who needs beds, now and to 2043

Care bed demand is driven almost entirely by the oldest old. The likelihood of needing residential care rises steeply with age, and the great majority of permanent residents are aged 85 and over, which is why the population aged 85+ is the demand denominator that matters (the reasoning is set out in our guide to beds per 100 people aged 85+). ONS small-area population data gives you the current 85+ count inside whatever catchment you draw, and the ONS 2022-based subnational projections give you its trajectory.

That trajectory is the part most appraisals skip. Nationally the 85+ population is projected to grow by roughly 65%, from about 1.47 million in 2025 to around 2.42 million by 2043. A catchment that looks adequately served today can be materially short within the life of the building you are about to fund. Always read demand at two dates: today, and at your chosen horizon.

Getting the catchment right

The catchment is the appraisal. Draw it too wide and you count older people who will never realistically move into your home; too tight and you understate genuine demand. Most residents come from a fairly local area, so a radius or drive-time of a few miles is a common starting point, tightened in dense cities and widened in rural areas where the nearest alternative may be far away. Two sense checks help: does the catchment respect real barriers (a river, a motorway, a change of county that shifts where families look), and is the 85+ population inside it large enough to benchmark at all? Very small populations produce unstable ratios and should be widened before you trust any figure.

Question two: how many beds already serve them

Supply comes from the CQC HSCA Active Locations register, the regulator's list of every care home currently registered to operate in England. For each home it records the number of registered beds, whether the home is registered for nursing as well as personal care, whether it is registered for dementia, and its latest inspection rating. Count the registered beds inside your catchment and you have the supply side.

Registration scope matters as much as the headline count. A catchment can look well supplied on total beds yet be short of nursing or dementia capacity specifically, which is often where the sharpest demand and the better fee rates sit. Read supply by scope, not just by number.

Question three: the gap versus the national rate

Demand and supply only mean something next to each other. The standard way to combine them is beds per 100 residents aged 85+: divide registered beds in the catchment by the 85+ population, then multiply by 100. England as a whole runs at roughly 32.5 beds per 100 aged 85+ (about 484,000 registered beds across some 14,700 homes), and that national figure is the benchmark to read your catchment against.

A practical reading used by Threshold: a catchment below about 0.85 of the national rate is genuinely undersupplied, above about 1.15 is oversupplied, and in between is broadly in line. You can see this calculation already done for every English local authority on the care demand and bed supply pages.

Read the quality of the stock, not just the count

Two catchments with identical bed counts are not identical markets if one is full of homes rated Good and the other is propped up by homes rated Requires improvement. Beds in weak homes are at-risk supply: capacity that may shrink or close, which surfaces as latent demand a new, well-run home can capture. The CQC rating attached to every home lets you separate durable supply from fragile supply. Our guide to CQC ratings for developers explains how to turn the rating mix into a development signal.

Question four: what the land is worth

Only now, with demand, supply, the gap and the quality of competition established, does a land value become defensible. Care schemes are appraised with the residual method, the same logic as residential but built on a per-bed basis: work out the completed value of the finished home (usually expressed per registered bed), subtract build cost, professional fees, finance and your required profit, and what remains is the most you can pay for the land. Because care value is really the value of a trading business, the completed value per bed does most of the work, and small changes in it move the land bid sharply. The care home residual appraisal guide sets out each line with a worked example.

Put the four answers on one page

The value of an appraisal is not any single number, it is the chain: this demand, from this catchment, against this registered supply, at this quality, implies this gap, which supports this many beds, which is worth this much land. A lender or investment committee will test every link, so each one should trace back to CQC or ONS source data rather than to a rule of thumb.

Assembling that chain by hand takes days per site. Threshold Care produces it from one pin in under 60 seconds: the over-85 catchment demand, every competing CQC-registered home and its rating, the bed-supply gap against the national rate, demand growth to 2043, and a maximum land bid. The point is not speed for its own sake, it is being able to screen twenty possibilities in the time it used to take to work up one, and bid with evidence on the two that stack.

Frequently asked questions

What data do you need to appraise a care home development site?

Two open datasets carry most of the appraisal: the CQC HSCA Active Locations register for supply (every registered home, its beds, nursing and dementia registration, and its rating) and ONS small-area population plus the 2022-based projections for demand. From those you can size the over-85 catchment, count competing beds, measure the gap against the national rate, and project demand to 2043. A residual calculation then converts the bed gap into a maximum land value.

How do you know if a care home site is viable?

Viability turns on whether a defined catchment is short of beds now or will be by your horizon, and whether that shortfall supports a home at a value that leaves room over build cost, fees, finance and profit. The quick test is beds per 100 residents aged 85+ against the national average of about 32.5: a catchment materially below it, with weak existing competition, is the strongest starting point. Demand growth to 2043 and the residual land value confirm whether the numbers actually stack.

How big should a care home catchment be?

Most residents come from a fairly local area, so a catchment is usually a radius or drive-time of a few miles, tighter in dense cities and wider in rural areas. The key check is that the population aged 85+ inside it is large enough to give a stable bed ratio; very small catchments swing wildly on a single home. Real barriers such as rivers, motorways and county boundaries should shape the catchment, not just distance.

How long does a care home site appraisal take?

Assembled by hand from CQC and ONS data, a defensible first-pass appraisal takes the best part of a day per site. Tools that hold the data pre-joined can produce the same demand, supply, gap and land-bid picture in under a minute, which is what makes it practical to screen many sites and concentrate effort on the few that stack.

Care figures are statistical estimates from official open data (CQC HSCA Active Locations, ONS population and 2022-based subnational projections) under the Open Government Licence. England coverage. Not investment or valuation advice.