The UK day nursery sector continues to demonstrate remarkable resilience and strength, with demand from families, increased government funding, and sustained investor interest supporting growth across the market.
Our latest Day Nurseries Market Review 2026 highlights a sector that is not only adapting to change but also creating new opportunities for operators, investors, and entrepreneurs alike. Here are some of the key takeaways from our report.
TRANSACTIONAL ACTIVITY
Today, there are roughly 15,090 children’s day nurseries operating across the UK, providing more than 870,000 places. The market remains highly fragmented, with private equity-backed operators accounting for around 6.8% of the market, while independent, owner-operated nurseries continue to form the backbone of provision and present attractive acquisition opportunities.
From a transactional perspective, momentum has been exceptionally strong over the last 18 months. 2025 was one of the busiest years on record for our Childcare & Education team at Christie & Co, with activity driven by a combination of strong trading performance, carefully planned exit strategies, and sellers looking to complete transactions ahead of anticipated tax changes taking effect from the first quarter of 2026.
That momentum continued throughout the first half of 2026, with appetite for high-quality nursery businesses and development opportunities remaining robust, and interest coming from buyers of every size. Our transaction data shows that corporates and large groups operating 21 or more settings accounted for 61% of completed deals during the first six months of this year. Group operators with between three and 20 settings represented a further 23%, while first-time buyers and single-setting operators made up the remaining 16%. These figures reflect confidence in the long-term prospects of the sector across the entire buyer landscape.
While buyer and seller activity varies throughout the UK, some areas stand out as especially attractive for growth. The South East, London commuter belt, expanding urban centres and key Midlands markets, for example, benefit from favourable demographics and strong workforce participation. At the same time, acquisition activity is healthy across Scotland, Wales and Northern Ireland, supported by continued demand for quality childcare provision and evolving policy frameworks
MARKET INFLUENCES
A major influence on the sector has been the Government’s childcare entitlement expansion. Since September 2025, families have been able to access 30 hours of funded childcare from the age of nine months through to school age. This final phase of funding reform is reshaping operator behaviour, capacity planning, and service delivery, particularly for younger age groups. Increased funding for children under two is helping many providers strengthen financial sustainability, reinvest in their facilities and teams, and expand capacity to meet growing demand. We are also seeing operators adapt their services to better support younger children as parental requirements continue to evolve.
Alongside funding reform, hybrid working remains an important factor influencing market dynamics. Many parents are combining funded childcare with flexible working arrangements, creating increased demand for part-time attendance patterns. While this presents operational challenges around occupancy management and staffing efficiency, demand remains particularly strong for flexible, year-round childcare services that fit around modern family life.
INVESTMENT INTO THE UK MARKET
Investor sentiment towards the sector also remains highly positive. Beyond operating businesses, day nursery properties are increasingly being recognised as essential infrastructure and an attractive defensive asset class. Long-term demand drivers, government-backed funding, and stable lease structures continue to support investment activity, while the sector’s alignment with social value and ESG objectives is attracting growing institutional interest.
SECTOR OUTLOOK
From my perspective, the day nursery sector is at a pivotal point. While operators continue to manage rising costs and workforce pressures, the combination of increased government funding, strong parental demand, and ongoing investor interest is creating significant opportunities for growth. Based on what we are seeing across the market, I expect activity to remain robust throughout the rest of 2026 and into 2027, supported by continued demand from families, ongoing investment in childcare and a healthy appetite from operators and investors looking to expand.
To find out more about the day nurseries market, read Christie & Co’s report here: https://www.christie.com/sectors/childcare-education/day-nurseries-market-review-2026/
You can also hear Nick Brown and the Christie & Co team present on ‘The evolving day nursery market landscape’ at the upcoming Early Years Breakfast Summit on Friday 2 October at 9.15am.
