The children’s social care property sector significantly expanded in 2025, with the number of registered children’s homes in England increasing by 15% to 4,010 homes, which reflects both the rising demand for residential care and the challenges local authorities face in securing sufficient foster placements.
The figures are revealed in Christie & Co’s newly-released Business Outlook 2026 report and show that, similar to 2024, market activity across the sector was moderate in 2025, as the supply of operational assets remained stark due to many operators retaining and expanding their existing businesses to meet the demand for services.
But, for those homes brought to the market, buyer interest was strong, particularly for high-quality operational businesses, well-located vacant properties, and those with C2 use and CLD.
This competitive marketplace supported resilient pricing in the sector.
2025 saw a rise in the number of local authorities seeking to bring residential children’s services in-house.
With ring-fenced budgets, several authorities in England and Wales acquired operational homes and properties suitable for conversion last year, and a sufficiency report published in December 2024 revealed that 77 local authorities plan to open their own children’s homes by the end of the 2026/27 financial year.
A major change effective in 2025 was with the landmark law in Wales to end profiteering from childcare in care.
The Health and Social Care (Wales) Act 2025 became law on 24 March 2025, making Wales the first UK nation to introduce legislation that phases out private sector ‘for-profit’ children’s residential and foster care providers.
In the future, care for looked-after children will be delivered solely by not-for-profit organisations, charities, and public bodies.
In 2025, 18,040 looked-after children (22% of all looked-after children) were placed more than 20 miles from home and 69% were placed within 20 miles.
To tackle this, in October 2024, the Government introduced the Looked After Children (Distance Placements) Bill, which will require local authorities to publish statistics about the number of looked-after children who are living 20 or more miles from their home because of a lack of placements within their local authority area.
The last update on this was in March 2025, and live updates can be sourced via the Parallel Parliament website.
Alongside this, the Department for Education is working in partnership with local government to develop Regional Care Co-operatives (RCCs), which will plan, commission, and deliver care places in fostering, children’s homes, and secure homes.
The Department will provide £3.46m in funding to two pathfinder regions up to 2026.
Bids were received from all local authorities and Greater Manchester and the South East were selected.
It could be viewed that larger providers will have an advantage over smaller providers.
As part of its annual sentiment survey, the company surveyed childcare and education professionals across the country to gather their views on the year ahead.
When asked about their sentiment in 2025, 40% said they feel positive, and 29% feel negative, while 31% remain neutral, which illustrates the uncertainty in the sector.
When asked about their sale and acquisition plans, 75% stated that they are looking to buy and/or sell this year.
PREDICTIONS FOR 2026
In 2026, Christie & Co expects:
Julie Kitson, director at Christie & Co, said: “While 2026 will undoubtedly bring challenges in what remains a complex and high‑risk sector, it also presents an opportunity for meaningful progress.
“The proposed Government reforms have the potential to reshape the sector in a way that strengthens outcomes for children and families, ensuring they receive the support they need to thrive.
“The year has started positively, with strong levels of enquiry, and we are already working to bring new opportunities to the market.”
In early Autumn 2025, Christie & Co was instructed to facilitate the assignment of a portfolio of six former children’s homes in Northampton and the Midlands.
The mandate drew a significant level of interest from children’s social care providers nationwide.
The leasehold nature of the portfolio also created a great level of interest from new organisations and individuals seeking to enter the sector, alongside interest from owners of single-setting children’s homes.
Originally designed by Robert Edis and built in 1886, this 48.66-acre estate is centred around Smallwood Manor, a Grade ll-listed Elizabethan-style country residence partly refurbished in 2021 to accommodate a children’s hospital and mental health centre.
It was previously a private school that ceased trading in 2021 and, although it was partly refurbished to provide alternative care facilities, it subsequently came back to the market in 2024.
In March 2025, the site was purchased by the independent children’s home provider, Resicare Alliance.