Elderly People Care Homes

Care home beds shortage needs radical site rethink

Victoria Hughes BarkerIs repurposing and transforming unwanted retail, hospitality and automotive property stock the way to solve the 2030 care home bed crisis, asks Victoria Hughes-Barker.

Research undertaken by JLL suggests that the UK will need some 10,000 new beds every year until 2030 in order to meet demand and avert a looming bed crisis. Research by Knight Frank in its recent Healthcare report shows that in the 2019/20 financial year, a total of 7,058 beds (122 homes) were newly registered and 6,789 (233 homes) were de-registered.

Supply is not meeting demand. In fact, supply is in danger of receding.

The Covid-19 pandemic has highlighted the importance of the social care sector and, particularly, the role that care homes play in supporting the NHS. So why aren’t developers and investors seizing on this demand, and possible return opportunities, in the way that they did, for example, in relation to student housing?

While the reasons are complex and varied one of the keys is finding suitable sites for development.

The care homes of bygone days were predominately refurbished large houses (typically in out-of-town locations). These are now viewed by investors as tertiary stock that is now outdated, too small and ultimately not fit-for-purpose, especially in a post-pandemic world. In fact, Knight Frank identified 6,500 of these homes at risk of closure in the next year. Investors want to see purpose built “Super Prime” facilities with flexible, future-proof designs that are easy to access, have around an acre of land and are near to centres from which to draw a talented workforce. These criteria fit sites that are in high demand, but short in supply, and not found on your typical brownfield housing development site.

So, what is the answer? Well, with a well-documented decline of the retail market, hotel market (PwC stating that hotels will take four years to recover to pre-Covid occupancy levels) and the automotive market (the BBC calling last September’s results for new car registrations the worst September this century) could we see a repurposing of edge-of-town retail, automotive and hospitality/leisure sites as an opportunity for care home developers and investors?

Think about it. An average car dealership site has great transport links (usually on a main road), over an acre of land and is usually close to centres to capitalise on accessibility. The same is true of small retail parks and some older hotels. As distressed assets inevitably start to enter the market and developers look for opportunities, it may be time for them to think outside the box in terms of requirements when instructing agents. Local authorities are keen to see redevelopment of sites rather than vacant land and all have bed targets imposed by central government that they will also be keen to meet – leading to more sympathetic conversations with planning authorities. Specialist healthcare architects are already working on future-proof flexible designs that don’t fit your standard “H” or “L” shape construction, meaning fitting a care home into a more unique site is a welcome challenge rather than a no-go.

One of the many things the Covid-19 pandemic has taught us is that we were woefully under-prepared to deal with a national healthcare crisis. If we don’t act now, what has often been dubbed the “Cinderella sector” to the NHS will not be ready to face the looming national bed crisis. Significant investment in the coming years is required in the social care sector of care homes and senior living in order to meet the demand that will be placed on its shoulders. Perhaps the sector needs its own “Fairy Godmother” developers and investors to think outside the box and instead of turning pumpkins into coaches to turn surplus car forecourts, hotels and retail premises into the pandemic proof care homes of the future.

Victoria Hughes-Barker is senior associate at Mills & Reeve

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Readers Comments

Interesting time to be raising these concerns when occupancy rates are down (about 80% in Oxfordshire from 90% before Covid), people are more reluctant to consider care homes and lots of new homes are being built or newly opened, not to mention our potential customer base being decimated.

By Anonymous

Amazing insight into the care home sector which has long been ignored ,

By Anonymous