Residential and Nursing Care Home Market

Market Context

Care homes are services that support an adult who requires short- or long-term care in a Care Quality Commission (CQC) registered residential and nursing homes. The type of services that can be provided in a registered residential care home are:

Short or long-term residential and nursing care.

Short or long-term specialist care, i.e. dementia

Respite residential or nursing care.

While the vast majority of people supported will be aged 65 and over, this market also includes people below the age of 65 for whom these types of service would be appropriate, for example people with early onset dementia.

Market Rating

The current overall Market Quality is good. There is currently a good amount of registered residential care and nursing homes in the market, although there is variation across Somerset with under supply in some areas and oversupply in others. There is a need to work with the market to ensure care home provision meets future demand and need, particularly surrounding the advancing levels of Dementia in Somerset.

Current market status

There are 115 care homes in Somerset that provide services to older people.

These homes have 5,238 beds registered with CQC.

As of the 10th March 2026 there were 676 admittable vacancies (13% of total beds).

Average occupancy in these homes stands at 82.18%.

Of the 4,261 occupied beds, Somerset Council currently commissions 1,798 beds, which is 43% of the market in Somerset.

In the longer term we believe there will be more demand for Nursing and Residential beds for people with mid to high levels of dementia. As of January 2023, NHS England estimated that just under 10,000 people in Somerset have dementia and this number is predicted to grow to 18,000 by 2035.

Market Data

All data is correct as of March 2026

Distance from desired commissioning objectives

Somerset Council wishes to reduce the number of people requiring Residential care over the next 10 years, and key to this work that is underway to further develop our model of Extra Care Housing, beginning with new contractual arrangements that came into effect from April 2025.

The success of this policy could impact upon a number of the care homes that are registered to provide residential care only. We will need to work with our provider market to identify homes that could be suitable for conversion to Nursing homes to meet future demands for these services.

We will also work with Somerset Council’s planning team to ensure that any new care home applications are considered alongside our knowledge of the social care landscape in Somerset. This work will mean that we have the right care homes built in the right locations to meet future demand and where the location is not right developers are asked to consider alternative types of social care services.

Market Risks

There are concerns regarding increasing costs to providers such as   National Living Wage which will increase by 4.1% from April 2026 and the impact this will have on the cost of delivering home care.

Changes to the rules around recruiting from overseas and the impact this could have on the workforce is risk to the market. The pledge to stop all overseas recruitment into Adult Social Care by 2028 is likely to lead to increased vacancies in the sector, which would lead to unmet need within care provisions.

Current areas of focus for commissioners

• Supporting the upskilling of the residential care home market to support the increasing levels of people living with Dementia.
• The implementation of new specifications for care home’s including day services, respite and the equipment policy in care homes.
• Exploring further opportunities for potential expansion of the number of block bed provisions in hard to procure areas.
• Strengthening links with planning colleagues to support the development of care homes into areas where there is the greatest need.