News
Knight Frank: care home sector showingsignsofpandemicrecovery
UK care home operators are set to see occupancy rates rise slowly and profits steady as the impacts of the pandemic show promising signs of receding, according to global property adviser Knight Frank. In its 2021 UKCare Homes Trading
Performance Review, Knight Frank found average occupancy is down year-on-year from 87.9 per cent from 2019-20 to 79.4 per cent in 2020-21. However, operators are now generally
reporting a slow recovery and Knight Frank expects this upward trend will continue. “Operators are experiencing increased
demand for beds and a corresponding backlog of potential residents, in addition to average weekly fees increasing by 6.7 per cent year-on-year,” it added. The report, which collates data from across
the UK care home sector and surveys operators on their individual performance, records 98,000 beds across 781 towns and cities. Sector-wide EBITDARM (earnings before
interest, taxes, depreciation, amortization, rent, and management fees) as a percentage of income, meanwhile, fell from last year’s level of 26.8 per cent to 26.2 per cent in 2020-21. However, Knight Frank expects
profitability will likely to be sustained amid the easing of nationwide lockdown restrictions and the resurgence in occupancy rates.
Furthermore, 11 per cent of operators
surveyed reported an EBITDARM margin of over 40 per cent of income this financial year, signalling many operators’ capacity to adapt and withstand the challenges of the pandemic to deliver strong financial results and a continually high standard of care for residents. Nevertheless, the 2021 Care Homes
Trading Performance Review also points to numerous unresolved challenges including the extent of how future government support, such as the adult social care infection control fund, will aid the sector and affect long-term profitability trends in addition to concerns around rising staff and property costs. Knight Frank’s research also highlights
‘vast disparities’ between the profitability of newer and older stock with margins falling from an average of 31.4 per cent for newer homes to 25.2 per cent for older stock. This demonstrates how the profitability
of the sector, and the wellbeing of residents, hinges on the refurbishment of older stock and the development of new and high-quality care assets. “Against the backdrop of the pandemic it’s
encouraging to see the start of a rebound in the care home market. But there is no doubt that significant challenges remain,” said Knight Frank head of healthcare Julian Evans. “The impact of government support on
profit margins is still an open question and the disparity in margins between new and old units is a cause for concern given the proportion of care homes which are more than 20 years old,” he added. “However, if developers and operators
focus on building new, high-quality homes and retrofitting older units, we remain confident in the future prospects of the sector.”
ARCO adopts new terminology
for housing with care sector times offputting, leaving them “unclear and uninspired” when considering an ever growing number of new living options now available. The organisation will work with members and the wider sector to support the adoption of the new term, including providing a clear toolkit and guide to language as well as infographics to describe the differences.
The Associated Retirement Community Operators (ARCO) has launched Integrated Retirement Community (IRC) as a new term for the housing with care sector. The move follows research on the views of
older people that showed they were “fed up” with outdated terminology, it said. ARCO consulted with 600 people aged
55 to 75+ year olds across England and found existing terms are confusing and at
December 2021 •
www.thecarehomeenvironment.com
Public trust in care home safety on the rise
Public trust in care home safety has almost doubled in the past year according to a survey by specialist dementia care provider Vida Healthcare. The North Yorkshire
outfit found 45 per cent of around 2,000 UK adults surveyed had confidence in the safety of care homes, up from 27 per cent in its 2020 survey. Other findings from the 2021 Vida
Healthcare survey include: l 47 per cent think of a care home as a home for older people to spend the rest of their lives rather than just a place for care delivery.
l 54 per cent of UK adults have or have had a friend or family member in a care home.
l 67 per cent claim to know more about the industry than ever before.
l 34 per cent said their impression of care homes was now positive than before the pandemic.
l 32 per cent believe that care homes offer a sense of community for residents.
l 56 per cent of respondents who have known someone in a care home said they had become concerned about their mental health due to separation during lockdown.
l 47 per cent agreed they would feel more comfortable if a loved one living with dementia lived in a care home with people on hand who can interact, support, and care for them.
l 40 per cent agreed that recreational activities are as important in the care of older people, particularly those living with dementia, as medication.
Vida Healthcare managing director James Rycroft (pictured) said: “Almost half of UK adults consider a care home as a home for older people to spend the rest of their lives rather than just a place for care delivery. “Despite this, we clearly have a
fantastic opportunity to educate the public and prove that care homes are a home for many vulnerable people which offer social activities, specialist care, and unique facilities.”
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