‘Lacklustre’ growth has meant the UK care home market is failing to keep up with rising demand, according to Knight Frank.
In its annual UK Healthcare Development Opportunities research report, the leading global property adviser said the past year had seen a net gain of just 43 beds combined with a net loss of 86 care homes.
Knight Frank said that while the number of new homes continued to be counteracted by the number of home closures, the number of available beds had still grown as smaller homes were being replaced by larger, more efficient operators.
Julian Evans, Head of Healthcare at Knight Frank, (pictured) said: “With much of the UK’s existing care home stock outdated and elderly population growth expected to drive unprecedented levels of bed demand going forward, it is clear that more care homes need to be built. Though there was a marginal net gain of beds over the past year, this is still not enough to address the crisis in provision and is likely to be further exacerbated as the next generation requirements for care grows at a faster rate than new care homes can be developed.
“Our analysis shows that the UK is already short of 100,000 market-standard beds and this will worsen over the next two decades unless existing stock is upgraded and the rate of new builds increase.
“Owing to the scarcity of stock and ongoing demand, the investment appetite for new care home schemes remains strong and opportunities exists for both investors and developers, with our Hotspots Index highlighting the range of opportunities nationally.”
South Glamorgan is identified as this year’s hotspot for investment and development in England and Wales due to its strong economic growth and limited levels of new supply despite the relatively cheap cost of land.
Knight Frank’s top five investment areas are: South Glamorgan, Greater London, Buckinghamshire, Wiltshire and Berkshire.
The property advisor cites the rising National Living Wage, insufficient funding, unfit for purpose buildings and failing care standards as the main reasons for care home closures, while building material and construction costs have restricted new development.