The UK childcare and education markets demonstrated strength and resilience in the first half of the year, with robust buyer demand matching a growing supply of businesses coming to market, according to a new report from Christie & Co.

The specialist business property adviser has released its Childcare & Education: Market Review 2025, which analyses the childcare and education markets in the first six months of 2025, including the children’s social care markets.

And it reveals that a diverse and active buyer pool – including individual investors, institutional funds, and charitable organisations – is driving acquisition activity, often with a focus on aligning investments with ESG goals.

The anticipated rise in Business Asset Disposal Relief from 10% to 18% in April 2026 is prompting many owners to consider their exit strategies, contributing to buoyant market conditions.

Despite operational pressures, such as rising National Insurance Contributions and wage increases, many businesses are adapting successfully, though fee sensitivity remains a challenge in some sectors, the report states.

Encouraging macro-economic indicators, such as 0.7% GDP growth in Q1 2025 and inflation easing to 2.8%, indicated improving financial conditions and continued market confidence.

While Consumer Price Index inflation increased to 3.4% in May, it is expected to remain around this level for some time.

And stable interest rates and the potential for future cuts could further stimulate development and acquisition activity.

Children’s social care market

The children’s social care property market remains robust, with properties benefiting from C2 or C2a use commanding premiums over those with standard residential (C3) use.

This trend is driven by sustained demand from local authority commissioning teams and providers expanding services to keep children within their communities.

In Wales, the Health and Social Care Act – now law – makes it the first UK nation to ban profit in fostering and children’s residential care services.

This legislative shift is prompting providers to restructure, with many seeking expert guidance to navigate the transition.

Despite a quieter first half of 2025, Christie & Co saw a surge in children’s care business owners actively reviewing their preparedness for sale, focusing on legal, financial, and operational considerations, through the eyes of alternative operators, buyers, and investors.

And buyer interest remains strong, particularly for high-quality, established providers in England, with many entrants motivated by a genuine commitment to improving outcomes for children and young people.

The financial landscape

According to Christie Finance, the lending appetite for the UK childcare and education sector remains strong, underpinned by favourable economic conditions, stable interest rates, and supportive government policies.

The broker also noted that lenders are showing a growing interest in supporting businesses that contribute positively to society.

The childcare and education sectors align well with the priorities of ethical investors and lenders who are actively seeking purpose-led businesses.

Julie Kitson, director at Christie & Co, said: “Despite the ever-changing landscape within this sector, the demand for quality businesses remains strong.

“Although appetite continues to be focused on education for corporate operators, mid-range buyers are still looking for children’s homes with a ‘Good’ OFSTED rating and well-managed homes.

“Emphasis on good outcomes for children is still paramount, with thoughts on retaining children beyond 16 years plus.

“We continue to work with operators looking to expand their portfolios and expect this to continue well into 2026.”