UK is facing a growing shortage of elderly care homes creating significant opportunity for investment and development.
Knight Frank’s latest UK Healthcare Report states, the UK’s population of over 65’s is forecast to grow by 10% over the next five years; however the number of new care home registrations is significantly decreasing.
Research shows there was a net loss of 189 elderly care homes in the 12 months to September 2015, equating to 2,200 fewer beds in the UK. Almost half of the beds lost were located in the South West region, with the East Midlands and Eastern regions seeing a net gain of 273,000 and 513,000 beds respectively.
While the supply of care beds is diminishing, underlying demographic trends point to an increase in demand for elderly residential care. If current trends continue, the existing bed supply of 456,400 is forecast to fall to 444,700, while the population of over 65s will rise from 11.4 million to 12.4 million, resulting in a shortage of care beds by 2020.
The growing shortage of care homes across the UK offers strong opportunities for care home developers and investors.
There remains a structural under provision of UK care beds. It’s both a national crisis but tremendous opportunity for inward investment.
- Surrey tops the table (10 new care homes), followed by Greater Manchester (8 new homes) and Greater London (7 new homes).
- In contrast, the highest number of de-registrations was recorded in Devon (24 care homes), followed by Greater London (17 homes). Greater Manchester area and Lancashire follow in a third position with 14 care homes de-registered in the 12 months to September 2015.
England & Wales hotspots:
- Greater London remains the top ranked county in England & Wales, despite having the highest land values, benefitting from the strength of underlying demand and shortage of supply. Greater London is expected to maintain its position as one of the best locations for care home investment and development.
- Some Northern regions, such as West Yorkshire, benefitted from lower land values and made it into the top ten.
- Two Welsh markets – South Glamorgan and Powys, and West Yorkshire surprisingly made it into the top ten, driven in particular by limited supply and low land values.
- This year’s analysis of Scottish hotspots shows a greater disparity in the rankings than last year. The Central area of Scotland moved up the ranks to first place, mainly driven by low levels of supply, while the Borders area retained its position in second place.
- The Highlands & Islands, the top ranked county in 2014, slipped to third position.