Care home property investment trends in the UK

The UK’s private pay care property market is posing an increased fascination for ambitious investors while also bringing the satisfaction of serving a community facing a resource shortage for its rapidly-expanding elderly demographic.  Here’s what you need to know about this investor-friendly industry.

A globally-viable investment market

According to a report published by Knight Frank,  the adverse impact of COVID-19 is not enough to hinder the projected growth of over 85 year-olds in the UK, which is due to grow by 1.2 million by 2040. Experts estimate that the post-pandemic growth of upmarket care home investment will only rise, as the potential for an economic downturn will lead to investors opting for the high-end spectrum of care services to access the most lucrative portion of the market. The UK’s “grey pound” wielders contribute £ 300 billion to its economy, the care market value for older people worth over £ 22.2 billion with over 60% accounted for by residential care home providers in the UK.  The care industry’s global market appeal stems from a renowned reputation and international investors looking to move from high-risk leisure industry investments to healthcare assets.

Growing demand for luxury care

Faced with unsurpassed demand combined with shifts towards more expensive nursing services, and increasing staff and property expenses, care providers also have to upgrade and reinvest in their facilities to meet the higher care standards. This has lead to an increase in fees, accompanied by a decrease in those eligible for private funding as many of the UK’s elderly are property owners with assets worth more than the minimum capital threshold. The UK’s care homes have mostly derived funds from public sources, and the private investment market is thriving as the affluent older generation opts for innovation-driven, technology-assisted elderly mental health care homes away from home. 

Bespoke holistic caregiving

The demand for care beds is expected to exceed supply by 75, 000 in 2030, making it imperative to build new residential mental health care homes in the UK and multi-faceted healthcare amenities for patients with long-term chronic conditions requiring specialized care. Despite the national bed shortage crisis and the unprecedented rise of complex cases like dementia forecasted to reach 1.6 million in 2050, there has been a significant demand for greater care standards and the transformation of care home design to achieve “outstanding” CQC and CWS rankings. This is due to greater awareness of the importance of a holistic lifestyle for conditions ranging from dementia and Alzheimer’s to stroke recovery, cardiovascular complications, and movement disorders.

A captivating purpose-built setting

Market analysis indicates that 1/3 of the nation’s property wealth is owned by households with 65+ occupants, these patrons tending to downsize their property, distribute the equity among family, and shift to sophisticated care home communities. A wholly condition-based approach in care homes for dementia patients is no longer viable, as it takes away from their freedom and individuality of older patients, creating a clinical “straitjacket.” Therefore, while evidence-based practices, CQC-approved frameworks, and operational principles like QIPP (Quality, Innovation, Productivity, & Prevention), it’s essential to proffer Personalized Care and Support Plans (PCSPs) with the help of assistive technology and an empowering care culture.

Fully-operational and hands-free enterprises

If you’re an investor tapping into the healthcare industry, opt for pre-existing upmarket buy-to-let care properties for a plethora of unmatched benefits. For instance, there’s zero involvement in running the enterprise while you stand to earn a 10% annual NET return without having to pay for maintenance and ground rent. Additionally, the best care homes for people with dementia offer purpose-built equipment and lifestyle amenities that only increase the value of this niche investment.

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