The UK care home sector has seen a minimal increase in bed numbers and is failing to keep up with demand, according to a new report.
Knight Frank’s annual UK Healthcare Development Opportunities 2020 report shows that while the number of care home beds increased by 2,500 in the last financial year, the number homes fell to 12,170. Knight Frank said 7,058 beds (122 homes) were registered in 2019/20 and 6,789 (233 homes) were de-registered.
Buckinghamshire was identified as the best investment and development area followed by Greater London, South Glamorgan, Berkshire and Cambridgeshire.
Knight Frank says there are 6,500 care homes at risk of closure over the next five years, equating to 140,000 beds. The global property expert estimates it will cost more than £15bn to upgrade existing beds to future proof them for the ageing population.
Julian Evans, Head of Healthcare at Knight Frank, (pictured) said: “The UK healthcare industry requires substantial investment in order to keep pace with present demand, let alone the provision that is going to be needed for the future as the population continues to age. Whilst the overall bed numbers have increased, this is still nowhere near enough to address the crisis in provision and is likely to be further exacerbated as the next generation ages at a faster rate than new care homes can be developed.
“This has been accelerated by the COVID-19 pandemic which has accelerated trends that will lead to closures of care homes that are no longer fit for purpose, resulting in a significant national shortfall of bed provision.
“Once the situation resolves around the COVID-19 crisis, we will see numerous changes around how operators fare and we expect that with the scarcity of stock and a continuing ageing population driving demand, the investment appetite for care home developments will remain strong from a range of investors. There are opportunities for both investors and developers across the entire UK, with our Hotspots Index highlighting the range of opportunities nationally.”