Christie Finance highlights strong demand and lending optimism in Childcare & Education Market Review 2025
Specialist business property adviser, Christie & Co, has released its ‘Childcare & Education: Market Review 2025’, which analyses the children’s day nurseries, children’s social care, SEND schools, and independent schools markets in the first half of 2025. The report includes insight from Alena Ray at Christie Finance, highlighting a buoyant lending environment across the sector.
Christie Finance
Key highlights from the report:
The upcoming policy change in September 2025, which will entitle children in eligible working families to up to 30 hours of funded childcare per week from nine months old, is expected to drive a substantial increase in demand. This, combined with a stable macroeconomic backdrop, is creating ideal conditions for operators to expand and invest. Lenders are responding positively, with a clear focus on financial performance and long-term sustainability.
Funding applications now typically require up-to-date management information and robust financial forecasts, reflecting a shift toward more strategic, data-driven lending decisions. This is particularly important as operators continue to manage rising wage costs and increased National Insurance contributions. Lenders are placing greater emphasis on business stability, cash flow management, and long-term planning.
A key trend emerging from the report is the rise in acquisition activity among existing operators. Many are leveraging the performance of their current settings to acquire additional sites, increasing occupancy and improving operational efficiency to enhance business value. This approach is enabling expansion with minimal personal capital investment, supporting organic growth across the sector.
Over the past 12 months, Christie Finance has seen a 52 percent increase in client instructions and a 67 percent rise in debt requirements, underscoring the sector’s strong momentum. Funding has been used across a range of purposes, with 40 percent allocated to acquisitions, 35 percent to refinance, and 25 percent to unsecured business investment. The majority of clients were existing operators, making up 75 percent of activity, while first-time buyers accounted for 25 percent.
One standout example involves an operator who acquired their first freehold setting in 2024 and, within 12 months, secured a second site. Christie Finance arranged a £7.63 million loan at 77 percent loan to value, with a competitive interest rate of 1.66 percent over base. By leveraging the strength of their existing business, the client expanded their footprint with limited personal cash input, demonstrating the power of a scalable, well-managed model.
Lenders are increasingly drawn to businesses that deliver measurable social value. The childcare sector, with its strong community focus, aligns well with the priorities of ethical investors and purpose-led lenders. Christie Finance has secured interest rates as low as 1.2 percent above the Bank of England base rate, with the sector average margin currently at 2.58 percent. This reflects growing confidence in the sector’s long-term prospects.
As the sector prepares for a significant policy-driven uplift in demand, the outlook for childcare and education finance remains highly positive. With lenders and operators aligned in their focus on sustainable, socially impactful growth, the market is well positioned for continued expansion throughout 2025 and beyond.
To read the full report, click here: https://www.christie.com/news-resources/publications/childcare-education-market-review-2025/
To discuss funding for your business, get in touch:
Alena Ray
Head of Real Estate
Email: Alena.Ray@christiefinance.com
Mobile: +44 7590 486 356