Care home commercial mortgages in Leeds: CQC ratings, lender appetite and what actually funds

Leeds has one of the strongest premium care home clusters in the North of England. The LS8 and LS17 corridor (Roundhay, Alwoodley, Moortown, Chapel Allerton) holds a concentration of mid-size private-pay and mixed-funded homes that have traded well through 2025 and into 2026. Lender appetite for the right asset has held up, but the CQC rating is the gating factor, and the gap between Outstanding, Good and Requires Improvement is the difference between a 70% LTV at 8.0% pa and not getting an offer at all.

This piece sets out which specialist desks are quoting actively, what occupancy and fee mix they want to see, how the goodwill versus bricks-and-mortar split works in practice, and what to do if a re-inspection is due before completion.

The Leeds care home market: LS8/LS17 premium cluster

The market splits into three clear price tiers locally. Premium private-pay homes through Alwoodley (LS17) and parts of Roundhay (LS8) trade on EBITDA multiples of 7 to 9 times for Good and Outstanding-rated stock, with bed counts typically 30 to 60. Mid-tier mixed-funded homes through Harehills and Chapeltown (LS7/LS8) sit at 5 to 7 times EBITDA. Older converted stock, often Victorian large houses, trades down at 4 to 5 times where it trades at all.

The lender pool segments along similar lines. Specialist healthcare desks at Shawbrook, Cambridge & Counties and Hampshire Trust Bank cover Good and Outstanding rated assets at 60 to 70% LTV. Some private-credit names take Requires Improvement at meaningfully tighter leverage (45 to 55%) on a workout basis, but the mainstream desks step back below Good.

CQC ratings and what each means for lender appetite

The Care Quality Commission grades on five domains (safe, effective, caring, responsive, well-led) and rolls up to an overall rating. The four overall outcomes drive lender appetite as follows.

CQC overall rating	Mainstream lender appetite	Typical LTV	Typical rate band
Outstanding	Full appetite, competitive	65–70%	8.0–8.5% pa
Good	Full appetite at most desks	60–70%	8.0–9.0% pa
Requires Improvement	Selective, private-credit only	45–55%	9.5–11% pa
Inadequate	No mainstream funding	n/a	n/a

A "Good" rating is the practical floor for funding from Shawbrook, Cambridge & Counties and Hampshire Trust Bank. If the home is rated "Requires Improvement" at the date of valuation, the deal needs to wait for a re-inspection that lifts the rating before mainstream funding becomes available, or move to private credit at meaningfully tighter terms.

Occupancy thresholds and what lenders read into them

Occupancy is the single biggest line item after CQC rating. Specialist desks want to see 85% or above for a Good-rated home, with 80% as the practical floor for Outstanding stock (Outstanding tends to fill faster, so even a temporary dip below 80% gets a fair hearing).

The other occupancy data point lenders test: trailing-12-month average versus current. A home running at 92% today but with a 78% TTM average reads as volatile and prices wider than a steady 87%. Stability over time matters as much as the headline number.

For a 42-bed home in LS17 currently at 90% occupancy with a TTM of 88%, that data shape is exactly what Shawbrook's healthcare desk wants to see at indicative-terms stage.

Fee mix: local authority vs private split

Private-pay weighted homes price keenest. A Roundhay home running 75% private-pay residents at an average weekly fee of £1,450 reads materially better than a Harehills home running 25% private-pay at £950 average across the book.

Local authority fees in West Yorkshire run £780 to £920 per week for standard residential care at mid-2026, with nursing top-ups taking that to £950 to £1,100. Private fees in LS8 and LS17 commonly clear £1,400 to £1,800. The gross EBITDA per bed difference is the entire reason premium-cluster stock trades on 8x earnings while mid-tier stock trades on 5x.

Goodwill vs bricks-and-mortar valuation

Specialist healthcare valuations split the asset value into two components. Bricks-and-mortar (the building shell and curtilage on a notional vacant-possession or alternative-use basis) and goodwill (the running business, the registration, the staff, the resident relationships, the trading history).

For Leeds care home freehold transactions at mid-2026, the typical split sits at 60/40 to 65/35 bricks-to-goodwill on Good and Outstanding rated stock. Premium boutique homes in LS17 sometimes split closer to 55/45 because the trading premium is real.

Lender treatment varies. Shawbrook's healthcare desk lends against the full going-concern value (bricks plus goodwill) at 60 to 65% LTV. Cambridge & Counties and Hampshire Trust Bank often cap goodwill exposure at a percentage of the total facility, in practice lending 70% against bricks and 50% against goodwill, which rolls up to a blended LTV in the high 50s.

For a £4.2M going-concern value home with a 65/35 split, that means £2.73M of bricks-and-mortar and £1.47M of goodwill. Shawbrook would lend up to roughly £2.73M (65% blended). Cambridge & Counties would lend roughly £1.91M (70% of bricks) plus £735,000 (50% of goodwill), for a £2.65M facility. Different desks, different structures, similar all-in number.

Active specialist lender desks

For a Good or Outstanding rated Leeds care home in the £2M to £8M facility bracket at mid-2026, four desks should be on the shortlist.

Shawbrook healthcare team. Active across Yorkshire, full going-concern lending, 60 to 70% LTV, 8.0 to 8.5% pa for Outstanding, 8.5 to 9.0% pa for Good.

Cambridge & Counties. Long-standing care home lender, regional underwriter who knows the LS8/LS17 cluster, 60 to 65% LTV with the bricks/goodwill split structure, 8.5 to 9.0% pa.

Hampshire Trust Bank. Specialist desk with appetite for Good-rated mid-size homes, 60 to 65% LTV, 8.5 to 9.0% pa, typically faster turnaround than Cambridge & Counties.

OakNorth. Active on larger transactions (£5M plus), going-concern lending, 60 to 65% LTV, 8.5 to 9.5% pa depending on covenant.

For larger group transactions (two or more homes), the same panel plus ASK Partners private credit for the higher-leverage and Requires-Improvement workouts.

Re-inspection timing and how to manage it

CQC inspection cycles run roughly every 12 to 30 months depending on the previous rating and any intervening events. Where an inspection is due in the next six months and the home's current rating is "Good" sitting on a borderline performance, the lender will sometimes pull terms or impose a re-inspection condition precedent.

Three practical moves on this. First, check the CQC website at indicative-terms stage and flag any inspection due inside six months to the lender up front. Surprises at credit committee kill deals. Second, where re-inspection risk is real, time the completion to fall after the next inspection date wherever possible. Third, if the inspection is imminent and unavoidable, structure the facility with a margin step-up that triggers if the rating drops a level, this gives the lender comfort to write the deal at par on day one.

Worked Roundhay refinance example

LS8, 38-bed home in Roundhay, rated Good across all five domains at the last inspection (14 months ago). Occupancy 89% current, 86% TTM. Fee mix 70% private at £1,520 average weekly, 30% local authority at £880 average. Trailing EBITDA £620,000 pa. Going-concern valuation £4.5M (65/35 bricks/goodwill split).

Existing first charge: £2.8M, ending fixed rate next quarter. Refinance target: £2.95M facility, modest capital raise for refurbishment.

EBITDA cover at 8.5% pa stressed to 10.0% over a 20-year amortisation. Monthly debt-service: roughly £28,500/month, £342,000 pa. EBITDA cover: £620,000 / £342,000 = 181%. Comfortably clears a 150% test.

Shawbrook quoted 8.4% pa at 65% LTV (£2.93M) on a 5-year fix. Cambridge & Counties quoted 8.6% pa at the bricks-plus-50%-goodwill blend (£2.66M). Hampshire Trust Bank quoted 8.5% pa at 60% LTV (£2.7M). The borrower landed with Shawbrook on rate and leverage.

CQC re-inspection due roughly 10 months post-completion. Flagged to Shawbrook at credit, no margin step-up imposed, condition precedent at completion confirmed clean inspection prior.

Personal guarantee scope and registered manager risk

Two operational items that come up at credit committee on almost every care home transaction.

Personal guarantees on owner-operator deals typically sit at 25 to 40% of the facility for an experienced operator with a clean trading record, scaling up to 50% for first-time care home operators or where the borrower has limited sector track record. The PG is rarely waived entirely on owner-operator deals at the £2M+ facility size.

Registered manager risk is the other quiet underwriting concern. The CQC requires every home to have a registered manager, and the loss of an experienced manager has been known to drop a home from Good to Requires Improvement at the next inspection. Lenders increasingly want to see the registered manager's tenure, contractual position and succession plan documented at indicative-terms stage. For a Roundhay home where the registered manager has been in post seven years with no notice given, that reads materially differently to a home where the registered manager is six months into a new role and the previous manager left under unclear circumstances.

What lenders will want at indicative-terms stage

For a clean indicative-terms run on a Leeds care home, send the following on the first call:

• Most recent CQC inspection report and date of the next due inspection
• Trailing 12-month occupancy data with monthly breakdown
• Fee mix (private vs local authority) with average weekly fee per resident in each category
• Two to three years of accounts showing EBITDA before owner remuneration
• Confirmation of registered manager tenure and any planned changes
• Asset details: bed count, en-suite ratio, last refurbishment, freehold or leasehold position

With that pack we run indicative terms across Shawbrook, Cambridge & Counties and Hampshire Trust Bank inside 48 hours, with an indicative rate range, LTV, and the structure each desk will want (bricks-only versus going-concern, blanket charge for groups, PG scope).

Talk to us about your care home

If you are looking at a Leeds care home freehold purchase or a refinance and you want indicative terms from the three or four specialist desks that actually fund the LS8 and LS17 cluster, send us the CQC rating, occupancy, fee mix and trailing EBITDA. We will come back inside 48 hours with terms and the practical structure each desk will want.

Contact us to discuss your care home case.

For the national care home lender network behind the Leeds desk, see the Leeds page on Commercial Mortgages Broker.