Scenario
What does it cost to open a small (1–3 bed) children's home?
Small homes (1, 2, or 3 beds) are the most common entry point for first-time providers. They sit in Ofsted's lower fee tier: a single £2,006 registration fee, with no separate Registered Manager fitness fee for homes of 3 or fewer places, so the total Ofsted charge is just £2,006. The property requirements are far easier to meet than for larger homes. The all-in cost is dominated by the property, not by Ofsted.
Why founders start with 1–3 beds
Three factors drive most first-time providers towards a small home: capital efficiency (a 3-bed property in many regions can be financed for under £100,000), single-RM coverage (one Registered Manager satisfies the staffing ratio), and regulatory simplicity (fewer rooms, fewer fire-safety zones, simpler statement of purpose). The Ofsted fee tier itself saves £2,188 compared to a 4+ bed home: a 1–3 place home pays a single £2,006 fee, where a 4+ place home pays £3,284 plus a £910 Registered Manager fitness fee (£4,194 in total). Not the largest line on the budget, but a useful margin for first-year operations.
What the £2,006 Ofsted charge buys you
The registration fee covers the application processing, the fit person interview for the Responsible Individual and Registered Manager, and the pre-registration inspection visit. For a home of 3 or fewer places there is no separate Registered Manager fitness fee. The £2,006 is the complete Ofsted charge. The £910 manager fitness fee only applies to homes of 4 or more places. The fee is non-refundable; if Ofsted reject the application you do not get it back.
Setup costs at the small-home tier
Property purchase or lease plus renovation typically lands between £40,000 and £60,000 for 1–3 beds (excluding the property purchase itself if you are buying, which can vary from £150,000 in the North East to £450,000 in Greater London). Fire safety assessment and works start at around £2,000. Furnishing a small home runs roughly £5,000: beds, soft furnishings, a single shared kitchen, laundry, and the essentials a small group needs. Insurance for a new provider with no track record sits at the higher end of the sector range.
The calculator, pre-filled to 3 beds
The interactive calculator below is set to the 3-bed scenario. Switch tiers to compare against larger homes, or use the share button to send a specific scenario to a co-founder or accountant.