Sector trends Chart 2 – Age and purpose-built status of independent sector care homes for older people, UK 2024
was in purpose-built homes (i.e. purpose- built from the foundations up, and not counting older properties with a new-build extension). The remaining 44 per cent of capacity was in conversions or partly purpose-built homes – see Chart 2. While ‘purpose-built’ is a useful indicator of the likely physical environment – and a good indicator of the home being recently built – there is a wide gap between the most modern third generation, ‘future-proofed’ purpose-built care homes and the less highly specified first-generation purpose-built homes first registered before the turn of the century. The term ‘future-proofed’ is used to describe a home which can reasonably be expected to meet any new physical environment standards that the regulator might introduce during the building’s lifetime, or that consumers may start to demand.
Physical environment rules set by a former English regulator required all new homes or extensions built after 2002 to have a floor space of at least 12m2
plus
ensuite bathroom space. The requirement was abandoned in the face of dire warnings from the care home sector of the capacity fallout that would follow, but it provides a marker for what any future regulatory requirement might be. ‘Future-proofed’ homes being built
now are likely to have room sizes of at least 14m2
, and possibly up to 20m2 , though Chart 3 Older people’s care home bed capacity gains and losses UK 1990 - January 2024
unfortunately there is no reliable data series of trends in room size. Wet rooms instead of conventional shower/bathrooms have become a standard feature of the specification now. More broadly, ESG (Environmental, Social and Governance) requirements are impinging on all sectors of the economy, including care homes. Most property investors looking for ‘investment- grade’ stock prefer to target purpose-built property in the care home sector, and in the healthcare sector more widely. But this does not mean that good quality, ‘total’ refurbishments are less capable of generating reliable earnings over a long period of time.
Chart 4 – Age and purpose-built status of independent sector care homes for younger adults, UK 2024 22
Legacy stock So how long would it take for legacy stock to be replaced, assuming that were a desirable objective? The answer is several decades, because ‘legacy’ care homes have remarkable resilience. Despite the fact that the very smallest homes are gradually being squeezed out of the market, the
www.thecarehomeenvironment.com October 2024
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