care sector – news
Bed shortages increase interest in care homes market
The care sector is a key growth area for construction in the UK. Here, we look at the opportunities and challenges in this sector
O
ver the next five years demand for care home places is expected to far exceed the
number of bed spaces available. Pressures will see a necessary
increase of around 9,000 bed spaces each year, while the current rate of care home development is at 5000-6000, leading to a substantial shortfall. The most-significant change in the
provision of residential care in the last 25 years has been the much-greater involvement of the private sector. More than 75% of all care homes, and
over 80% of care beds in England, are now operated by the private sector,
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healthcaredm.co.uk
with NHS-operated beds accounting for only 1% of total provision.
New investment Hayley Thornley, research manager at AMA Research, said: “Despite the challenges currently facing the sector, the private care home market continues to attract new investment as the value of the sterling has made the UK market more attractive to overseas investors. “In the longer term, the sector is
expected to outperform the wider healthcare market due to an acute under-supply of appropriate accommodation, together with increasing demand from an ageing population, with the number of people aged over 65 in the UK forecast to be 50% higher in 2035 than it was in 2010.” The figures are taken from AMA's
Care Homes Construction Market Report – UK 2017-2021 Analysis. It reveals that the care home market
has become highly polarised in recent years, with developers continuing to focus on locations characterised by a
strong self-pay market where higher fees provide investors with a stronger return on capital. As such, new care home
developments will be largely led by the availability of land. However, developers are facing
increasing competition from alternative sectors such as housing, student accommodation, and hotels, particularly in more-desirable areas, and, as a result, new care home development is forecast to remain relatively static in the short-term, despite an upturn in planning applications and increased availability of funding.
A positive impact In terms of development, there has been significant activity in new and emerging areas of the care market, particularly care villages and extra care schemes. And, while delays to the Care Act
2014 have created uncertainty in how local authority funding is going to work and the likely financial implications on the care home market; major reforms to
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