Day nursery market remains robust as demand, government funding & investor interest drive growth, says Christie & Co

The report estimates that around 15,090 children's day nurseries operate across the UK, providing more than 870,000 places. 86 per cent of these settings are in England, 7 per cent in Scotland, 5 per cent in Wales and 2 per cent in Northern Ireland. The average size of a setting in the UK is 57.6 places. While private equity-backed operators account for an estimated 6.8 per cent of the market, the sector remains predominantly made up of independent, owner-operated settings, which continue to be the backbone of provision and a key source of acquisition opportunities.

2025 was one of the busiest years on record for Christie & Co’s Childcare & Education team, driven by a combination of well-planned exit strategies, robust trading performance, and sellers seeking to complete transactions ahead of anticipated tax changes effective from Q1 2026.

This momentum continued into the first half of 2026, with buyer appetite for high-quality nursery businesses and development opportunities remaining robust and interest coming from operators and investors of all sizes. Christie & Co's transaction data from the first half of 2026 shows that corporates and large groups (21 settings and above) accounted for 61 per cent of completed deals, while group operators with between three and 20 settings represented 23 per cent. First-time buyers and single-setting operators made up the remaining 16 per cent of transactions, demonstrating continued confidence in the long-term prospects of the sector across the entire buyer spectrum.

The report also highlights growing investment and consolidation activity across the market. Larger operators continue to pursue growth through acquisitions and organic expansion, while medium-sized and small groups are scaling their footprints through strategic bolt-on opportunities. Notable growth stories include operators such as Kids Planet Day Nurseries, Bright Stars Nursery Group and Storal.

The UK children’s day nurseries sector is navigating a period of transformation following the final phase of the Government’s childcare entitlement expansion, which from September 2025 provides 30 hours of funded childcare for children from nine months old through to school age. This funding reform is reshaping provider behaviour and capacity planning, particularly for younger age groups. Increased funding for children aged under two is enabling many providers to improve financial sustainability, reinvest in facilities and staff, and expand provision to meet rising demand. Operators are increasingly tailoring services to support younger children, reflecting changing parental needs and the impact of expanded childcare entitlements.

The report identifies hybrid working as another significant influence on market dynamics, with parents increasingly combining funded childcare with flexible working patterns, leading to greater demand for part-time attendance and creating new operational challenges for providers managing occupancy and staffing efficiency. At the same time, demand remains particularly strong for flexible, year-round services that accommodate modern working arrangements.

Regional trends continue to vary, but Christie & Co identifies the South East, London commuter belts, growing urban centres and Midlands markets as particularly attractive locations for growth due to healthy workforce participation and favourable demographic trends. Meanwhile, acquisition activity remains robust across Scotland, Wales, and Northern Ireland, supported by evolving policy frameworks and continued demand for quality childcare provision.

The report also notes that investment appetite remains strong beyond operating businesses. Day nursery properties are increasingly viewed as essential infrastructure, and a defensive and attractive asset class for investors, supported by long-term demand drivers, government-backed funding, and stable lease structures. The sector's growing alignment with social value and ESG objectives is also attracting increasing interest from institutional capital.

Alongside great buyer demand, access to finance remains supportive. Christie Finance has recorded a 48.4 per cent increase in operators and entrepreneurs seeking funding for childcare and education investments over the past 12 months, reflecting confidence in the sector’s long-term prospects and growing demand for high-quality childcare provision.

Nick Brown, Director & Head of Brokerage – Childcare & Education at Christie & Co, comments, “The day nurseries sector is at a pivotal moment, increasingly being recognised as a vital part of the UK’s economic and social infrastructure. While operators continue to navigate rising costs and workforce pressures, increased government funding, strong parental demand, and sustained investor interest are creating significant opportunities for growth. We expect market activity to remain robust through the rest of 2026 and into 2027, underpinned by continued demand from families, ongoing investment in childcare, and a healthy appetite from investors and operators looking to expand.”

To access the full report, visit: https://www.christie.com/sectors/childcare-education/day-nurseries-market-review-2026/

----------------------

For further information on this press release, contact: