Shortfall in Care Home bed spaces despite construction activity & technological advances
While it is well known that the UK has an aging population up to 6,500 care homes are at risk of closure within the next five years, this is the equivalent to 140,000 bed spaces. In the year ending December 2020, an estimated 300 contracts were awarded in the care home sector, providing just over 3,600 bed spaces. However, by 2025, the UK faces an anticipated shortfall of 28,000 bed spaces, despite this strong pipeline of construction activity.
Michelle Turner, editor of the Care Home Construction Report states “Did the government make the right decision including the care home sector within its latest 2021 legislation reform surround leasehold properties? It is a topic that has caused some controversy with parties on both sides of the fence holding strong arguments both for and against the move. Our latest Care Homes Construction Market Report delves into the Care Home market, it’s players and the current UK care home stock. Giving the reader the insight to draw their own conclusion on this and many other issues surrounding this market.”
A stark fact from 2020 is that due to the care home sector’s disproportionately high mortality rates from Covid-19 there was an overall drop of occupancy levels to around 80%. However, Covid-19 is likely to accelerate the development of more large, purpose-built care homes offering more amenities, greater ability for social distancing and utilising digital technology. These more sophisticated and higher quality development are likely to drive demand for refurbishment and RMI activity.
Total care home sector revenue in 2020/2021, is down by almost 3% from the previous year due to the Covid-19 pandemic. The private/independent sector accounted for 91% of this figure. Despite this drop in value within the last year, the market is expected to return to growth from 2021 onwards thanks in part to the COVID-19 vaccination scheme now running in the UK.