In 2024, UK business owners navigated a period of uncertainty, with a snap election and government change in July followed by an Autumn Budget that presented “difficult decisions” for many business owners.
Despite challenges, the UK mergers and acquisitions (M&A) market demonstrated resilience, with significant growth in high-value M&A transactions, strengthening investor confidence. According to Experian’s Q3 Market Report UK M&A experienced a 49% year-on-year growth in value. Although the volume of deals slightly lagged behind the surge in transaction value, the overall increase in M&A activity highlighted a stable and optimistic investment environment. Altius Group’s recognition as a Top 10 most active advisor in the UK reflects the firm’s place in the ongoing rise in market confidence and M&A activity.
The UK medical sector saw rapid growth in 2024, driven by both public and private sector developments. With the NHS facing persistent pressures, private healthcare has become a critical alternative for many patients. NHS waiting lists remained high throughout the year, hovering around 7.6 million people, leading to increased demand for private pay medical services as patients sought faster access to care. This trend is expected to continue, with waiting lists forecasted to remain around 6.5 million by the end of 2027.
In response to this rising demand, the private healthcare sector is expanding at a remarkable pace. The self-pay market has become a significant growth area within the industry, expected to reach a valuation of £13.8 billion by 2026. The “new normal” of patients opting for private care reflects a shift in the healthcare landscape, where reliance on the NHA is supplemented, and in many cases replaced, by private services.
Government investment in healthcare also saw a significant boost in 2024, as the Autumn Budget allocated an additional £22 billion to health and social care revenue and capital funding. The NHS budget alone increased by 4.7%, reaching £181.4 billion for 2024-25. This funding commitment aims to alleviate some of the pressures on public health services, though the NHS continues to face systemic challenges that have limited its ability to reduce wait times and improve patient access.
Economic Outlook and Key Market Drivers in 2025
Several economic and policy shifts are likely to impact the medical market this year. In addition to the increased NHS funding, the Government’s commitment of £520 million to a life sciences manufacturing fund signals a positive shift toward bolstering the UK’s capabilities in life sciences and medical manufacturing. Furthermore, the uplift in the National Institute for Health Research (NIHR) budget comes as part of a broader £2 billion allocation for research and development within the life sciences industry. This investment is set to provide vital support for innovations, creating opportunities for growth within both the public and private sectors.
Despite these investments, the economic environment remains challenging and while projected GDP growth of 1.2% indicates a reasonable recovery, the increasing unemployment rate, currently standing at 4.4% in Q1 2025, may pose additional challenges for the industry. Nonetheless, the steady expansion of private healthcare and the rise of specialised medical services, such as elective procedures and cosmetic treatments, suggest that demand for these services will remain strong despite broader economic pressures.
Trends and Opportunities in Private Healthcare and Aesthetics
The growing demand for private healthcare services reflects broader market trends that present significant growth opportunities, particularly in the aesthetics market. The UK aesthetics industry is projected to reach £3.6 billion by the end of 2025, driven by advancements in technology, a population that is both growing and ageing, and consumer demand shaped by social media trends. The market for injectables such as Botox is especially vibrant, with 58% of cosmetic practitioners specialising in this area, and opportunities in the weight loss injectables market are on the rise following their soaring popularity in 2024. The injectables market alone is projected to reach £11.7 billion by 2026, highlighting an unprecedented opportunity for manufacturers, distributors and clinics to capture market share.
Despite this growth, the aesthetics industry faces regulatory uncertainty in 2025. The previous Government set out guidelines for licensing cosmetic practitioners and the premises they operate from, yet the new Labour Government has not confirmed whether these regulations will be implemented. For investors and clinic owners, understanding potential regulatory developments will be essential to navigating this lucrative yet complex market.
Strategic Planning for the Year Ahead
As 2025 unfolds, the medical sector is positioned for continued growth. For private healthcare providers, the persistent challenges faced by the NHS present an ongoing opportunity to attract patients seeking more accessible, timely care. Meanwhile, the Government’s support for life sciences and R&D within the medical sector presents opportunities for businesses involved in manufacturing and development. And, as demand for aesthetics continues to climb, staying informed about regulatory developments will be crucial for maintaining a resilient aesthetics business.
The beginning of a new year offers the chance to navigate these changes with optimism and strategic vision. At Redwoods Dowling Kerr, we remain committed to providing you with the insights and resources to make informed decisions in this evolving market. We look forward to working alongside business owners to assist them with their exit and acquisition goals during this window of opportunity.
*This article is an adapted excerpt from Redwoods Dowling Kerr’s 2025 Business Insights Market Report, which can be viewed here.
If you have questions about your business sale or acquisition and the process involved, please feel free to contact a member of our team.
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