UK care home bed supply grew by just 0.1% in the past year as developers paused operations to deal with the impact of the pandemic, Knight Frank has found.
Knight Frank’s annual UK Healthcare Development Opportunities 2021 research report shows that total care home beds across the UK rose to 480,072 across 12,034 care homes.
The leading global property adviser said UK care home supply has grown by only 6% in the last decade while the over 65 population has increased by 22%.
A lack of quality property for older people is a further concern with 29% of existing beds without en-suite facilities and 21% of UK homes currently rated by the CQC as ‘requires improvement’ or ‘inadequate’.
Capacity problems are set to be exacerbated by further closures as the government ends its year-long financial support package.
The report also reveals a number of positive indicators, however, including a rebound in occupancy in the second quarter of 2021 after a drop from 89% to 79% in the 12 months to April 2021.
Construction activity has also returned to near pre-pandemic levels with 35 new care homes (2,430 beds) delivered or due to be delivered by end of Q2, compared to 4,610 beds delivered in the whole of 2020. There are over 7,000 beds currently under construction and a further 10,000 in the planning or tender stage.
Julian Evans, Head of Healthcare at Knight Frank, (pictured) said: “The pandemic has brought significant challenges for the provision of high-quality care home beds across the UK, and the sector needs substantial investment if it is to match the rising demand for care facilities. While the past year has seen a modest increase in the total number of beds, this rate of growth remains insufficient and we risk an imminent care bed crisis, especially given the projected surge in the UK’s over 65 population in the coming decade.
“It is vital that new homes are built and existing stock is upgraded to meet the standards required of care providers. Though development activity is showing signs of recovery, the industry is still grappling with the latent effects of the pandemic, and we expect these problems to persist into the next year. There are concerns over limited finance funding development in the sector owing to increasingly risk averse high street clearing banks being reluctant to take a development risk combined with increased cost of raw materials and labour. A full recovery will rest on the targeted use of granular data to map regional demographic trends and pinpoint opportunities for development.”