Crisis As 140,000 Old People Are Going To Lose Their Care Home Beds In The Next 5 Years
Britain is facing a care home crisis, with 6,600 properties at risk of closure over the next five years, resulting in the loss of 140,000 beds for the elderly.
Data from Knight Frank shows that in the past year, 11% of Britain’s care homes have closed. The cost of replacing those at risk of closure is £15B.
Operators have had to react to staffing challenges ahead of Brexit. With an acute shortage of qualified nurses, the introduction of and subsequent increase in the National Living Wage has affected an already constrained labour market.
The price of inflation on raw materials has also restrained new care home development.
The U.K. care market is facing an imminent crisis as the sector struggles to cope with a national shortage of beds, which will be exacerbated by an over-65 population that is forecast to rise from 11.6 million to 12.9 million by 2021.
Of the existing care home stock, more than 85% is over 50 years old and is becoming less and less fit for purpose, so demand is already outstripping supply in the care home market.
In spite of this opportunity to tap into a sector in need of new assets, the U.K. real estate sector has been slow to embrace the care home market.
“This national crisis in provision is placing greater pressure on the government to provide sufficient funding for social care and encourage local authorities to support care home development in order to speed up the rate of delivery,” Knight Frank head of healthcare, hotels and leisure Julian Evans said.
“However we are only going to solve the problem by getting private equity to invest in the market. Our research estimates that there is around £3.5B of U.K. private equity and £20B of overseas private equity looking to enter the care home market. We need to utilise this now, otherwise the crisis will become a full-blown disaster.”