I looked into this when I saw the dross which passes for pre school care in Edmonton London. From my quite limited investigations, the problem seems to be the staff, who are at the bottom of the employable tree. You can see that if you go to Asda, Boots, take a bus etc. Those doing "service" jobs would not be employed elsewhere as they are just not up to the job but in London, they can get jobs because everyone with skills can get a better job.
Mathematically, the limits on childcare for tax credits purposes means that this is the high point, beyond which is becomes difficult to charge extra. The fact that this limit is national whereas property prices and consequently rents are not uniform does not help.
Thus, if you are squeezed by effective price caps and ever increasing rents, your margin is low and reducing and to top that, the staff (in certain areas) are just not up to the job.
I think that if you are very well financed and that may include the purchase of grounds and buildings, then I think the numbers work far better in your favour but moving from child minding to operating a nursery with very limited finance does not seem viable if you are going to have to recruit staff and rent premises.