The UK is facing a £15bn bill to replace 6,600 lost care homes over the next five years, global property consultancy Knight Frank says.
Knight Frank’s Care Homes Trading Performance Review says the UK is facing a national care home crisis with the loss of 140,000 beds.
Julian Evans, Head of Healthcare Hotels & Leisure, Knight Frank, commented: “The entrenched crisis in UK care home bed provision shows no sign of abating. The issue will be further exacerbated as the baby boomer generation ages at a faster rate than new care homes can be developed.
“2016 brought an annual net loss in UK care homes and beds of 11% and 5%, respectively. We expect this to get worse, as our research estimates that circa 6,600 care home’s are at risk of closure over the next five years, which equates to 140,000 beds. It will cost approximately £15bn to build the new homes to replace these beds.”
Knight Frank say the national bed shortage is being exacerbated by an increase in the over 65 population from 11.6m to 12.9m by 2021.
The property consultant said 85% of care home stock was over 50 years old and was becoming less fit for purpose resulting in demand outstripping supply.
Julian added: “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.
“However we are only going to solve the problem by getting private equity to invest in the market. Our research estimates that there is c£3.5bn of UK private equity and c£20bn 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.”