Bridging finance for care homes

The opportunity at speed

The UK care market is moving quickly. Transaction volumes in the first half of 2025 reached £1.75bn, more than doubling year on year. Larger facilities over 60 beds make up a small share of available stock, a signal that purpose-built homes are in short supply and that well-located mid-sized assets are hotly contested. At the same time, self-funded resident fees have risen by around 5-10% and local authority fees in England are up by 8.6%. That combination of strong demand and rising operating costs is pushing operators to act decisively when the right property becomes available.

This is where bridging finance fits. The UK bridging market grew past £10bn in 2024 and is forecast to exceed £12bn by the end of 2025. Completion times typically sit around 38-43 days, with many cases landing faster. Monthly rates around 0.64% are common for strong cases, and loan-to-value can reach up to 75% against suitable security. Exits are clear and varied, often via property sale or a remortgage to a longer-term buy-to-let or commercial product once trading data and compliance are in place.

Care operators use bridging to secure time-sensitive acquisitions, cover refurbishment or compliance works, unlock capital from an existing portfolio, or resolve chain breaks ahead of a regulator inspection or a seasonal admission uptick. Traditional mortgages move more slowly and rely heavily on trading history, whereas a bridge focuses on asset value and the exit plan.

Speed and certainty often beat the cheapest rate when the right care home comes to market.

If you need quick decisions, flexible underwriting, and an emphasis on collateral, bridging can help you move first and negotiate with confidence. With a UK-based broker like Kandoo guiding the process, you can compare options, model exits, and keep your operating capital focused on residents and staff.

Who benefits most

Bridging can suit established care home groups expanding regionally, first-time entrants partnering with experienced managers, and operators upgrading existing homes to meet compliance or EPC standards. It also helps buyers competing at auction, where proof of funds and short completion dates are non-negotiable. If your challenge is timing rather than affordability, a bridge can bridge the gap between opportunity and longer-term funding.

Funding routes to consider

1. Regulated bridging against a personal residence to release equity quickly.

2. Unregulated commercial bridging secured on care assets or investment property.

3. Development or heavy refurb finance for extensions and reconfigurations.

4. Light refurb bridging for cosmetic upgrades and compliance works.

5. Auction finance to meet 28-day completion deadlines.

6. Bridge-to-let or bridge-to-commercial for a pre-agreed refinance path.

Price, timeline and outcomes

Who can qualify

Eligibility varies by lender, but a strong application usually combines credible experience, an asset with robust fundamentals, and a clear, viable exit. Track record in care helps, yet first-time operators can be considered where a strong management team, CQC strategy, and realistic business plan are in place. Lenders will assess location, bed mix, occupancy potential, staffing model, and the scope of any refurbishment. Security can include the target care home, additional property, or a portfolio cross-charge to lower the rate or increase leverage.

Adverse credit is not automatically a barrier if the asset and exit are strong. Expect enhanced due diligence, including CQC position, compliance history, and environmental checks. In Scotland and Wales, legal processes and regulators differ, so build in time for local conveyancing and registration. Kandoo can help you prepare a lender-ready pack, coordinate valuation and legal workstreams, and present your case to multiple funders so you can compare terms without losing time.

From enquiry to drawdown

1. Outline goals, asset details, timescale, and required loan amount.

2. Provide initial documents and consent for credit and AML checks.

3. Receive terms in principle and model interest and fees.

4. Instruct valuation and legal due diligence with clear timelines.

5. Finalise facility structure, including retained or serviced interest.

6. Satisfy conditions precedent and confirm exit strategy milestones.

7. Complete, draw funds, and commence works or acquisition.

Upsides and trade-offs

Next steps you can take today:

• Request indicative terms based on your asset and timeline.

• Book valuation early to de-risk the completion schedule.

• Map your exit with at least two viable alternatives.

Before you press go

A bridge should solve a timing problem, not create a funding headache. Pressure-test your exit against conservative assumptions for occupancy, fee uplifts, and staffing costs. If you plan to refinance, speak to a term lender early so the debt quantum and covenants align with the refurbished trading profile. Build a realistic works programme with contingency for supply chain delays and regulatory approvals. Review all fees in the effective annual cost, including interest, arrangement, exit, valuation, and legal. Finally, consider regional nuances in England, Scotland, and Wales that may affect completion time or security perfection, and keep stakeholders updated to maintain momentum.

Alternatives to weigh up

1. Commercial mortgage for long-term ownership at lower rates.

2. Asset refinance across your portfolio to release equity.

3. Vendor financing or deferred consideration on acquisitions.

4. Mezzanine finance to top up equity behind senior debt.

5. Specialist development finance for extensions or heavy conversions.

Frequently asked questions

Q: What rates should I expect on a care home bridge? A: Strong cases can see monthly pricing around 0.64%, with variability by leverage, asset, experience, and exit. Lower LTV and additional security can tighten margins.

Q: How fast can funds be drawn? A: Typical completions run 38-43 days, often faster with organised legals and early valuation. Auction timelines may require upfront diligence to compress stages.

Q: What exits are acceptable to lenders? A: Common exits include property sale, a buy-to-let or commercial remortgage, or a portfolio refinance. Sale accounts for the majority of exits, with remortgage also widely used.

Q: How much can I borrow against the asset? A: Up to 75% LTV is common on suitable security. Higher leverage may be possible with additional collateral or a lower risk profile.

Q: Can I borrow with imperfect credit? A: Potentially, yes. Asset quality and exit credibility carry significant weight. Expect additional checks and slightly higher pricing if there is adverse credit.

Q: Does this work UK-wide? A: Yes, though legal processes differ across England, Scotland, and Wales. Local conveyancing timelines and regulator considerations should be factored into your plan.

How Kandoo helps

Kandoo is a UK-based retail finance broker. We match care operators with competitive bridging lenders, coordinate valuation and legal work, and model exits so you act with confidence. Speak to us for indicative terms, timing guidance, and options tailored to your asset and growth plans.

Important information

This guide is for information only and does not constitute advice. Eligibility and rates depend on your circumstances and the asset. Security may be required. Think carefully before securing debts against property.