Smaller regional care operators are reporting occupancy is largely back to pre-pandemic levels, a Christie & Co market review has shown.
Through interviews of local and regional operators, it found ‘wide variation’ in occupancy trends across the UK. While smaller regional operators were seeing a more positive picture, larger providers were reporting lower overall rates.
‘Positively, the majority of operators report good enquiry levels, which suggests that occupancy rates will continue to re-build in 2023, its Care Market Review 2022 report said.
Christie & Co would not disclose the number of operators that took part in interviews when asked by Care Markets UK.
As well as occupancy, the document analyses the transactional market in the UK, looking at buyer appetite, activity and investor demand, local authority fee increases, and the funding landscape. Christie & Co has 13,500 registered buyers on its database.
So far this year, corporate operators and investors have made up 33% of deals while first-time buyers made up just 7% – a fall of 9% since 2018, which is reflective of the rising funding challenges for entrants and higher value stock on the market.
Almost half (48%) of deals in 2022 concluded to buyers who live over 100 miles from their target business. ‘A large number of deals were concluded in and around urban centres, yet there has been an increase in the number of care homes transacting in rural and coastal areas,’ the report said.
It found a disparity between fee increases throughout the UK, from 3.1% to 12.8%, with an average residential fee rise in England of 5.4%, and nursing fees growing by 6.8%. Going forward, the company expects the burden on the self-funded client base to increase.
Christie & Co’s finance arm has seen 8.3% fewer funded deals in the sector this year, as operators looked to their portfolios to expand or restructure existing debt, it said. The average loan size increased by 5.8%, suggesting funding in the sector was evolving to provide more refinance to buy or expand.
Rob Kinsman, regional director – care at Christie & Co, said: ‘We have confidence that the entrepreneurial nature of the sector will ensure the transactional market continues to thrive despite the growing economic headwinds.’