Market gains beds despite loss of care homes, Knight Frank reveals

Mandip Bhogal, associate development consultant, Knight Frank

There was a marginal net gain of 43 beds in the care home market in the year to April despite a net loss of 86 homes, research by Knight Frank has shown.

Data showed that 219 existing homes and 6,459 beds were de-registered and a total of 133 new properties and 6,502 beds were added to the market.

The three main reasons for closure were failing care standards, financial stress and redevelopment.

The report, UK Healthcare: Development opportunities 2019, said the number of new beds added was being counteracted by homes being removed. ‘However, it is worth noting that a number of existing homes are also opting to extend (and refurbish) their existing sites and increase bed numbers,’ it said.

As of April, 450 operators were in the process of extending.

In total, the UK care home market was made up of 12,250 homes and 477,100 beds, its research found. Of the homes, 7,520 were for personal care and 4,730 were for nursing care. Of the beds, 228,100 were for personal care and 249,000 were for nursing care.

Over 90% of homes were owned by private operators, while less than 10% were publicly owned by local authorities or the NHS.

In terms of new developments, the report said that in the South East 1,700 beds entered the market in the year to April, while another 1,500 were under construction and a further 3,200 were in the planning process.

The property consultancy said new developments were focused on markets that have the greatest levels of private-pay residents, with the South East, Midlands regions, South West and East of England with the greatest share of privately funded homes and also the greatest amount of development activity.

‘In contrast, developers are more hesitant to build homes in regions that rely heavily on publicly-funded residents with Wales and the North East being prime examples,’ the report said.

During a presentation today (Tuesday 4 June) Mandip Bhogal, associate development consultant at Knight Frank, told an audience that the 85-plus population was going to increase 111% over the next two decades.

He said: ‘With the current shortfall of market standard beds in conjunction with the poor quality of the existing stock, which may not be viable to operate in the near future, means there’s a huge appetite for developing new state-of-the-art facilities fit for 21st century.

‘Demand is high for the private pay market which begs a question what will happen to the local authority end of the market as local authority fees may not support development appraisals?’