Care Home Construction Grants & Funding Options: What’s Available in the UK?

January 26, 2026

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Building or improving a care home is a big commitment, and finding the right funding is essential whether you’re just starting out or have years of experience. There are several grants and incentives available across the UK to help with care home projects, though working out which options fit your needs can take some digging.

This blog covers key funding routes for care home development in 2025 and how owners can access them.

Why Funding Support Matters

With more people needing elderly care, there’s growing pressure on the government and local councils to expand capacity, update older homes, and raise the standard of care environments. The good news is that there’s real financial support available to help cover the costs of building or upgrading care homes.
Getting the right funding can help you:
  • Accelerate development timelines
  • Reduce upfront capital expenditure.
  • Make your project more sustainable.
  • Reach new or underserved communities.

 

1. Local Authority Capital Grants

Many local councils run their own grant schemes to boost social care capacity in their area. These are usually tied to adult social care budgets and local market needs.
Typical Uses:
  • New residential care home construction
  • Converting existing buildings into CQC-compliant care settings
  • Improving accessibility or dementia-friendly features
How to Apply:
  • Keep an eye on your council’s adult social care tenders, capital plans, or housing support programmes.
  • It’s also worth reaching out directly to commissioning teams to check what’s currently available.
Tip: Councils are more likely to support schemes that increase capacity for publicly funded residents or meet specific community needs.
 

2. Social Care Investment Funds

A number of specialist funds in the UK invest in care infrastructure. Public-private investment partnerships and private equity-backed funds often co-invest with operators.
Examples include:
  • Target Healthcare REIT
  • Octopus Healthcare
  • Impact Healthcare REIT
Benefits:
  • Long-term leasing models that free up capital
  • Alignment with ESG and sustainability goals
  • Potential for larger-scale developments
If you have a solid track record or are working with experienced development partners, you’re more likely to benefit from this kind of funding.

 

3. Energy Efficiency Grants & Green Incentives

If your care home build or upgrade includes eco-friendly features, you might be able to tap into grants from government-backed green schemes.
Funding may support:
  • Heat pump installation
  • Solar panels and renewable energy systems
  • Improved insulation and glazing
  • Energy-efficient lighting and heating
Schemes to explore:
  • Boiler Upgrade Scheme (BUS)
  • Local Authority Delivery (LAD) scheme
  • Social Housing Decarbonisation Fund (SHDF)
You’ll usually need to work with local energy teams or approved installers to access these programmes.

 

4. NHS Partnerships and Integrated Care Boards (ICBs)

If your care home offers nursing or specialist dementia care, it’s worth exploring partnerships with NHS trusts or ICBs, as these can sometimes open doors to funding or land.
Some ICBs are open to joint ventures or capital support, especially if your plans help reduce hospital discharge delays or support end-of-life care in the community.
Speak to:
  • Your regional ICB or Clinical Commissioning Group (CCG)
  • NHS England estate leads

 

5. Bank Loans and Specialist Care Sector Finance

Traditional loans are still a mainstay for many care home operators. These days, though, more high-street and challenger banks offer lending products designed specifically for the care sector.
When you’re comparing lenders, look for those who:
  • Understand CQC regulation and care home operating models.
  • Offer interest-only options during construction.
  • Provide valuation advice and asset-backed security models.
Examples:
  • Shawbrook Bank (Healthcare Finance Division)
  • Lloyds Bank (Care Sector Team)
  • Handelsbanken (Localised lending decisions)

 

6. Charitable and Non-Profit Support

Some foundations and housing associations also offer capital support or discounted land for care homes that deliver particular social benefits. These might include:
  • Not-for-profit care housing partnerships
  • Faith-based organisations offering development land
  • Community interest companies investing in adult care
While these options might not be as flexible as commercial funding, they can provide long-term stability and support for projects with a clear social mission.

How to Maximise Your Chances of Securing Funding

  • Begin with a solid business case. Show there’s real demand, outline your operating plans, and make sure your finances stack up.
  • Get in touch with local authorities early on. If your plans line up with local care needs or strategies, it adds a lot of credibility.
  • Stay flexible. You might want to look at phased builds or hybrid models that mix private and publicly funded residents.
  • Don’t be afraid to bring in sector experts. Planning consultants, grant advisors, and care development specialists can make a real difference.

Final Thought

Securing funding for a care home project in 2025 isn’t always straightforward, but it’s definitely achievable. With the right information, good partners, and careful planning, you can find the support you need to build a care home that really makes a difference in your community.
At Care Home Builders, we’re here to help at every step, from sorting out your funding strategy to handing over the keys to your new care home.
If you’re thinking about starting or growing a care home project, let’s chat about how we can help make it a reality.
Get in touch to talk through funding options, partnerships, or development opportunities in your area.