The Day Nursery Markets in 2025: A Regional Outlook

Image by Paul Marlow for Unsplash

We recently launched our Childcare & Education Market Review 2025 report, which outlines the demand, growth, and opportunities surrounding the children’s day nursery market in the first half of 2025. 

In this blog post, we take a closer look at the local markets across the UK and outline the key trends and challenges that we're seeing…

The market for children’s day nurseries in Scotland for the first half of the year was robust, and we saw a surge in transactions. The Central Belt and, in particular, Glasgow and its surrounding areas, continue to be a focal point for demand, with several nurseries going under offer within weeks of being listed. However, appetite is not limited to the Central Belt, with Scottish regional groups and corporate buyers alike indicating an interest in growing and expanding by acquiring high-quality settings with strong occupancy rates, excellent management teams, and a history of positive grades with the Care Inspectorate.

During H1 2025, there was consistent growth in the day nursery market across the North East and Yorkshire regions. This was driven by an increasing demand for premium childcare and the expansion of both independent nurseries and larger groups. These regions have seen active buyer interest -  as demonstrated by the sale of a freehold setting in Leeds, which went on the market and had a deal agreed within a month.

Transactions have included a mix of freehold sales and smaller leasehold deals; we anticipate this trend to continue due to recent changes in government policies and economic shifts reshaping the childcare and education markets.

The market in the North West of England remains strong, with a record number of transactions in H1 2025. A clearer future landscape has led to more business inspections, instructions, and accepted offers. While 2024 saw more buyers than sellers, recent months have seen a significant increase in enquiries from operators looking to sell, seeking guidance on maximising business value, and ensuring smooth transitions for staff, parents, and children.

Day nursery transactions in North Wales saw a slight increase, with group operators such as Kids Planet Day Nurseries and  S4YC Childcare continuing to acquire individual settings and expand their portfolios. However, transactions remain slower compared with the North West of England. English operators are generally reluctant to manage the additional challenges posed by two regulatory bodies, Ofsted and Care Inspectorate Wales.

A highlight from the first half of this year has been a significant increase in demand, especially from new entrants. The Midlands saw increased activity from larger corporate operators over the last few years and, to exacerbate demand, there was an uptick from regional groups such as Little Scallywags Day Nursery in 2024.

We now have a large pool in a third category of buyers who tend to be professionals with other businesses or qualified careers who are looking for alternative businesses as part of their portfolios. This has all led to supply constantly having to catch up with demand, and we regularly receive enquiries for properties which are already under offer or have recently been sold.

Recent inspection activity has seen a number of regional groups looking to get advice on value, and we anticipate more groups coming to market in the second half of the year.

The first half of 2025 saw significant changes in the sector concerning funding, Living Wage and employers’ allowance, and government policy related to consumables/funded hours. While this created a degree of uncertainty for buyers and sellers, it has not dampened the appetite for high-quality nurseries across the region.

While buyers are putting their due diligence efforts on forward-looking projections and factoring in the impacts of the changes, we continue to see a strong level of market activity and have a significant number of deals agreed with corporate operators, regional groups, and first-time buyers, demonstrating that the enthusiasm for the sector is continuing.

The first half of 2025 saw significant activity in South London and the South across a wide range of businesses, and has been marked by one of the busiest starts to the year we have experienced. One notable example of this was with the sale of Parson's Green Nursery in Southwest London – a business which achieves exceptional profits. The property generated multiple offers and was ultimately acquired by Inspired Education Group.

Day nurseries and childcare businesses in the South have consistently been in demand, and this demand is now greater than ever, as evidenced by the number of enquiries from both existing operators looking to expand and first-time buyers wanting to enter the market. As always, property values remain strong, leading several owners to retain their properties while creating leases for successful buyers.

We have seen a significant increase in the amount of activity in the South West of England and South Wales in the first half of this year, up on what we have previously seen. Owners who are looking to exit have made the most of the demand from a full range of buyers including heightened interest from the large national and regional operators have seen these areas of the country which are now seen as hot spots for both consolidation and expansion.

The key to the successes in these locations has been helping sellers to prepare their business for sale, advising them on what to expect in a sales process and matching the most active, well-funded buyers to their nursery, all in a highly confidential manner. We have seen interest in both leasehold and freehold opportunities, and with a strong pipeline of transactions, this looks likely to continue moving forward.

To find out more, read our Childcare and Education Market Review 2025 here.