The opportunity for growth & development in the Scottish elderly care market

Unlike many parts of the UK, Scotland has, in recent years, been overlooked from a new-build development perspective, primarily due to the 60-bed limit imposed by the Care Inspectorate post-COVID for new-build homes. This restriction has recently been lifted, and the new limit is 100 beds with certain provisions, namely, each unit in a new home must be no more than 10 beds. Above 80 beds, there is also the requirement to have team leaders in each unit, which may temper care home sizes to between 60 and 80 beds.

The underlying demand from the ageing demographic in Scotland is growing rapidly. 21% of the population in Scotland is over 65 years of age, and this is set to increase to 25% by 2035. The over-85s cohort is set to rise, shifting from 2% to 4% in the same period.

Only 55% of the existing stock is purpose-built, and only 36% have wetroom facilities. As is the case across the rest of the UK, some smaller care homes, which often lack wetroom provision, have been closing. Scotland has lost 2,637 care home beds since 2021, with an average size of 33 beds across 81 homes. There have been 1,999 new beds over the same period, indicating a net loss of 638 beds over the four years. This accounts for both new-build homes and those that have been converted or reconfigured for care use.

There is a current undersupply of 19,793 wetroom beds across Scotland, and projections indicate that this shortage of market-standard provision will only worsen in the coming years.

By 2031, we expect this shortfall to sit at 21,434 and, by 2036, to reach 27,683. This growing deficit underscores the urgent need for strategic planning and investment to ensure that future demand can be met effectively. A large proportion of the existing providers report strong occupancy levels in assets, which may not necessarily be future-proof, highlighting the robust demand trend in the region.

In many instances, smaller, converted homes are well-placed to cater for their local markets, particularly in areas of lower population density. Based on the undeniable increase in demand and general lack of existing modern wetroom facilities, we believe there is a significant opportunity for both regional and corporate care operators to capitalise on the early mover advantage by investing in new developments across Scotland. In addition, operators also have the opportunity to retrofit or reconfigure older stock that may not currently align with the latest market standards, thereby enhancing their competitiveness and future-proofing their homes. With the sector evolving to meet growing demand, strategic investment in high-quality care facilities will not only address existing gaps but also position operators for long-term success in an increasingly competitive market.

To find out more about the Scottish elderly care market, read our ‘Scottish Healthcare Market Review 2026’ report, here.