117 care homes close as need for beds increases


The UK care home sector has continued to see a net loss in the number of homes and beds, with the past year seeing a net loss of 117 homes and 388 beds, according to the latest research by leading global property adviser Knight Frank.


The annual UK Healthcare Development Opportunities 2018 research report shows that whilst there continues to be a net loss in beds and homes, this figure is much lower than the previous year, at 388 as opposed to 2,612. This is driven by smaller care homes closing whilst larger, more efficient and viable schemes open throughout the UK.


The Knight Frank UK Care Home Development Index identifies which UK locations present the best prospects for investment and development. This year, Greater London leads the hotspots list in England whilst the Central area of Scotland remains in top place for the third consecutive year. Greater London benefits from a projected elderly population growth of 46% in the next 15 years and 38% projected GDP growth in the same period, which is well above the national averages, and the need to replenish the loss of beds. The top five in England and Wales are Greater London, South Glamorgan, Buckinghamshire, Berkshire and Cambridgeshire.


Julian Evans, Head of Hotels, Healthcare and Leisure at Knight Frank, said: “The UK healthcare industry is less developed than other sectors and therefore requires substantial investment in order to keep pace with present demand, let alone the provision that is going to be needed for the future. Whilst the gap closed on the net loss of beds compared to last year, this is still not 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.


“We estimate that we require in excess of £15 billion to upgrade existing beds in order to future-proof and that approximately 6,500 care homes are at risk of closure over the next 5 years, which equates to 140,000 beds.


“Due to the scarcity of stock and a continuing ageing population driving demand, the investment appetite for care home developments remain strong and there are opportunities for both investors and developers across the entire UK, with our Hotspots Index highlighting the range of opportunities nationally.”


Evidence suggests that the care homes that are closing are due to a range of factors including the continued impact of the National Living Wage that has further affected an already constrained labour market and ongoing staffing challenges including an acute shortage of qualified nurses. In addition, many buildings are not fit for purpose whilst there is insufficient funding available for reinvestment into existing care homes, combined with building material inflation costs which has served to restrain new care home development.


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