Care home profitability rose for the first time in four years in 2015/16, property specialist Knight Frank has revealed.
The 2016 Care Homes Trading Performance Review shows profitability up from 27.1% in 2014/15 to 27.5%.
Dr Lee Elliott, head of commercial research at Knight Frank, said: “Annual profit levels have grown for only the second time in nine years of historical data which we have compiled. This is clearly a welcome result for operators battling in these challenging times.”
Occupancy rates rose for the fifth consecutive year from 88.3% to 88.4%, the highest level since 2008.
Occupancy levels were higher in personal care (90.7%) than nursing care (87.7%) driven by rising privately funded demand.
Average weekly fees rose by 2.7% to an all-time high of £694, the fifth consecutive rise. Personal care fees rose by 2.2% to £600, with nursing care up by 3.9% to £726.
Unsurprisingly, the south east had the highest nursing home fees at £897 fuelled by higher property and labour costs, high levels of demand and a more affluent population.
Staff costs rose by 3.2% to £21,040 per resident, accounting for 58.2% of income. Staff costs were highest in the south east at £24,938 with costs below £22,000 in all other regions, bar London (£24,390) and the south west (£24,358).
Property costs rose by 2.3% to £2,194 per occupied bed, or 6.7% of income, with food costs accounting for 3.6% of income.
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