The UK is facing a national crisis with 6,500 care homes totalling 140,000 beds at risk of closure over the next five years, Knight Frank has warned.
Research by the property expert found the expected shortfall will be exacerbated by increased demand for care homes by 2050 with one in ten adults set to be over 80 by 2050 compared to one in 20 currently.
Julian Evans, Head of Healthcare at Knight Frank, (pictured) said: “Whilst the COVID-19 pandemic has demonstrated the outstanding collaboration between the private sector, social care sector and NHS at this time of need and the strength in controlling infection levels, it has also unfortunately highlighted the lack of investment by successive governments into the UK’s healthcare sector, and therefore the urgent need to prioritise preventative and crisis funding.
“At present, there is not enough care bed capacity and there is a structural under-provision of beds in the social care sector. The pandemic has accelerated trends to scrutinise those buildings that are not fit for purpose whilst emphasising the insufficient funding available for reinvestment into existing care homes, which has therefore expedited the number of potential care home closures. This will result in a national bed crisis unless significant inward investment in the UK care home sector is taken.”
Knight Frank estimates the UK will require more than £15bn to future proof the care home market with COVID-19 having accelerated the closure of stock that is no longer fit for purpose.
The property expert also revealed the UK ranked lower than Belgium, the Netherlands, France and Germany, with only 13,000 elderly care beds per 100,000 people over 80. Belgium and the Netherlands, moreover, have a significantly higher proportion at over 25,000 elderly care beds per 100,000 people over 80.
Julian added: “Once the situation resolves around the COVID-19 pandemic, we will see a number of 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. There will undoubtedly be a flight to quality as investors seek defensive healthcare assets and we anticipate that investment into the sector will be robust, from a broad church of domestic and overseas investors.”