If you run, buy, or sell a day nursery in Southern England, demographics are not background noise. They directly shape occupancy, fee mix, staffing pressure, and ultimately what buyers will pay.
The tricky part in 2026 is that the story is not one simple trend. Birth numbers, fertility, migration, and parental age are all pulling in slightly different directions. Some local areas are seeing more young families. Others are ageing quickly. Some are feeling intense competition for places. Others are dealing with patchy demand and tougher affordability for parents.
This article explains what is changing, why it matters for nursery sales in the South, and what buyers and sellers should do differently as a result.
A quick note on geography
When we say “Southern England”, most people mean a mix of London, the South East, and the South West. Those areas do not behave the same way.
- London often shows strong childcare demand, but can be sensitive to cost of living, commuting patterns, and churn.
- The South East can be highly variable, with large differences between local authorities.
- The South West is projected to grow quickly overall, but with an older population profile in many areas.
So the goal is not to treat the South as one market. It is to understand the local demand shape around the nursery you are buying or selling.
1) Births have nudged up nationally, but many southern regions still saw declines
The first thing buyers look at is the size of the incoming cohort. That usually means births and the under-fives population.
In 2024, England and Wales recorded 594,677 live births, a small increase of 0.6% compared with 2023. That was the first year-on-year increase since 2021.
However, the regional picture matters more for nursery demand. The ONS notes that several English regions experienced a decline in live births in 2024, including the South East and the South West.
What does that mean for sales? It changes how buyers interpret risk.
- In areas with declining births, buyers will focus more on the nursery’s competitive position and brand strength, not just the postcode.
- It increases the importance of under-2 demand, funded hours, and flexible models that attract working parents.
- It makes “average” nurseries more sensitive to competition, because there are fewer children to go around.
This is one reason we are seeing stronger pricing discipline in some southern pockets. Buyers are still active, but they want to see evidence that demand is secure for that specific setting.
2) Fertility is still historically low, and parental age keeps rising
Even with births ticking up slightly, fertility remains low. In 2024, the total fertility rate for England and Wales was 1.41 children per woman, the lowest value on record for the third year running.
Alongside this, parental age continues to rise. The ONS reports standardised mean ages in 2024 of 31.0 for mothers and 33.9 for fathers. Mothers living in London had the highest standardised mean age across English regions and Wales, at 32.5 years.
This shift in parental age matters in nursery sales for two reasons.
First, older parents are more likely to be in established careers. That can increase demand for full-time childcare, wraparound care, and longer day patterns. In many southern markets, that supports the value of nurseries with strong full-time occupancy and a stable fee model.
Second, delayed parenthood can create a lumpier demand curve. You see pockets of intense demand in some areas and slower movement in others. For buyers, that increases the value of nurseries that can demonstrate steady enquiry flow and good conversion rates, rather than relying on the general market being buoyant.
3) Population change is not only about births, it is also about migration and where families settle
One of the most important demographic realities in the South is that population growth is heavily influenced by migration, both international and internal.
Nationally, England’s population is projected to increase over the next decade. In the ONS 2022-based subnational projections, the population of England is projected to increase by 6.4% between mid-2022 and mid-2032.
Within that, the South West is projected to be the fastest-growing region by mid-2032, with projected growth of 7.5%, an increase of 430,000 people.
That growth does not automatically mean more nursery demand in every town. The detail matters.
- In some South West areas, growth is driven by older age groups, which does not translate into a larger under-fives cohort.
- In other areas, particularly those attracting working-age households, it can lift demand for childcare, but often with staffing and premises constraints.
For buyers and sellers, this creates a clear practical takeaway: do not rely on a regional headline. Look at the specific local authority, the under-fives profile, and the housing and employment dynamics around the setting.
4) Childcare supply is tightening in some ways, even where places are rising
Demographics influence demand. Supply influences pricing and deal strength.
The Department for Education’s Childcare and Early Years Provider Survey 2025 estimated 53,600 early years providers in England in total. The same survey estimated 1,620,800 registered places, with a 1% increase in places between 2024 and 2025. It also reported that group-based provider places increased by 3%, while childminder places fell by 7%.
This matters for the South because many markets rely heavily on group-based settings to carry demand, especially for under-2s. If childminder capacity continues to shrink, nurseries with strong under-2 provision and a stable staffing model can become more valuable.
Ofsted’s childcare providers and inspections statistics also give a useful supply signal. As at 31 August 2025, there were 46,600 providers registered on the Early Years Register, and they offered 1.29 million childcare places, up 1% from the previous year.
When buyers see supply tightening in one part of the market, they are often more comfortable paying for nurseries that have a clear operational edge, such as strong staffing stability, good leadership, and capacity that is genuinely usable.
5) “Accessibility” varies across the South, and that affects competition
One of the more practical pieces of recent analysis is childcare accessibility, measured as hours of childcare per child per week.
A February 2026 DfE analysis found that, on average, childcare accessibility in England was about 12.2 hours per child per week. Regionally, London was highest at 13.1 hours. The South East was 12.3 and the South West was 11.9.
There are two reasons this matters in nursery sales.
First, it hints at where competition for places is intense. Lower accessibility can mean less capacity relative to children, which can support occupancy and fees, but only if staffing and premises allow the nursery to offer the hours parents want.
Second, the South East being described as “most variable” in the same analysis is a warning flag for buyers. It means local conditions vary widely. A setting in one part of the South East can behave very differently to another, even if they are only an hour apart.
In 2026, that pushes buyers to focus less on general regional assumptions and more on micro-market evidence: enquiry volume, conversion, local competitor capacity, and the nursery’s reputation.
6) Funded childcare expansion has changed demand patterns, especially for under-2s
The expansion of funded childcare entitlements for working parents has been reshaping demand for babies and toddlers.
Government publications note that since September 2024, working parents of 9-month-olds have been eligible for up to 15 hours a week of funded childcare, rising to 30 hours from September 2025.
From a sales point of view, this matters because it changes what buyers value:
- Under-2 capacity that is properly staffed and consistently filled
- Strong operational control of ratios, rotas, and recruitment
- A sustainable approach to funded places that protects margin
- A fee and extras structure that stays within statutory guidance
This is where demographic shifts and regulation collide. In parts of Southern England where working-age migration is strong and parents are in employment, under-2 demand can be a major value driver. In areas where affordability is tight, the funded offer can be the difference between steady occupancy and volatility.
Buyers will ask, and sellers should be ready to answer:
- What proportion of income is funded versus private fee-paying?
- What is the under-2 occupancy trend across the last 12 to 24 months?
- How does the nursery manage funded hours alongside paid hours?
- What is the real margin on the funded mix after staffing costs?
7) What this means for valuations and deal terms in the South
Demographics rarely change the valuation method. They change the buyer’s perception of risk and growth.
In Southern England in 2026, we commonly see three valuation dynamics:
Strong settings in strong micro-markets still attract competition
Where a nursery can evidence stable occupancy, strong leadership, low staff turnover, and clear demand drivers, demographics can support confidence. Buyers often move faster and negotiate less aggressively.
Average settings need a sharper story
If births are flat or falling locally, buyers need to understand why this nursery wins. The story cannot be “the market is good”. It has to be “we have a defendable position”.
Margins and staffing stability matter more than ever
Where demographics suggest demand could become more competitive, buyers protect themselves by focusing on sustainable profit, staffing risk, and operational systems. If those are weak, they will either discount price or push for risk-sharing terms.
That is why some deals are now leaning more heavily on:
- longer handovers for key managers
- retentions tied to staffing or occupancy stability
- staged payments where there is genuine uncertainty
Practical guidance for sellers in Southern England
If you are preparing to sell, demographic shifts change what you should present to buyers.
Focus on:
- Evidence of enquiry flow, conversion, and occupancy stability
- Under-2 performance, including how you staff it safely and consistently
- A clear explanation of your local market, including competitor capacity
- Your fee mix and how funded hours are managed sustainably
- Leadership depth, including what happens if one key person leaves
Buyers can accept demographic headwinds if the nursery is well run. They struggle when the nursery is fragile and the market is uncertain.
Practical guidance for buyers in Southern England
If you are buying, do not stop at region-level assumptions. Build diligence around the micro-market.
Ask for:
- 24 months of occupancy by age band
- enquiry and conversion data, even if simple
- staffing rota evidence that shows ratios are genuinely covered
- the funding mix and how it affects margin
- the nursery’s competitive position, including what nearby providers offer
Then stress test it:
- What happens if occupancy drops by 5%?
- What happens if wage costs rise but fees cannot move quickly?
- What happens if a key manager leaves in the first six months?
A buyer who models those scenarios early is far less likely to overpay.
John Gaskell
Demographics do not decide whether a nursery is a good purchase. They decide how much confidence a buyer can have in future demand. In Southern England, the strongest sales in 2026 are coming from settings that can prove their local position, show stable occupancy by age band, and demonstrate that staffing and leadership are strong enough to carry the nursery through change.
Sources
Office for National Statistics, Births in England and Wales: 2024 (live births total 594,677; regional notes including South East and South West declines; parental age and non-UK-born mothers): https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/birthsummarytablesenglandandwales/2024
Office for National Statistics, Births in England and Wales: 2024 (refreshed populations) (TFR 1.41; parental standardised mean ages; London mothers’ highest mean age): https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/birthsummarytablesenglandandwales/2024refreshedpopulations
Office for National Statistics, Subnational population projections for England: 2022-based (England growth to mid-2032; South West projected fastest growth at 7.5%): https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/bulletins/subnationalpopulationprojectionsforengland/2022based
Department for Education, Childcare and early years provider survey: Reporting year 2025 (providers 53,600; places 1,620,800; childminder place decline and group-based place increase): https://explore-education-statistics.service.gov.uk/find-statistics/childcare-and-early-years-provider-survey/2025
Ofsted, Childcare providers and inspections as at 31 August 2025 (Early Years Register provider count 46,600; 1.29m places): https://www.gov.uk/government/statistics/childcare-providers-and-inspections-as-at-31-august-2025/main-findings-childcare-providers-and-inspections-as-at-31-august-2025
Department for Education, The effect of school-based nurseries on childcare accessibility (regional childcare accessibility hours per child; London, South East, South West figures; published 4 February 2026): https://www.gov.uk/government/publications/the-effect-of-school-based-nurseries-on-childcare-accessibility/commentary-the-effect-of-school-based-nurseries-on-childcare-accessibility
Department for Education, Getting it right from the start: how early years practitioners work with babies and toddlers (notes entitlement expansion for 9-month-olds and increase to 30 hours from September 2025): https://www.gov.uk/government/publications/getting-it-right-from-the-start-how-early-years-practitioners-work-with-babies-and-toddlers/getting-it-right-from-the-start-how-early-years-practitioners-work-with-babies-and-toddlers
