Care Homes Construction Market Report – UK 2019-2023

The 5th edition of the Care Homes Construction Market Report – UK 2019-2023 will be of particular interest to care providers in the private and local authority sectors and construction / service companies involved in the long-term care sector.

AMA Research has published the 5th edition of the ‘Care Homes Construction Market Report UK 2019-2023’.

This report should be of particular interest to care providers in the private and local authority sectors. Including construction/service companies involved in the long-term care sector.

 

 

 

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The 5th edition of the ‘Care Homes Construction Market Report – UK 2019-2023’ will be of particular interest to care providers in the private and local authority sectors and construction / service companies involved in the long-term care sector.

Key issues covered:

  • Structure and size of the UK care homes market in both the independent and voluntary/local authority sectors.
  • Value of contracts awarded 2017 to 2019 and pipeline analysis to 2023 – UK and regional breakdown.
  • Analysis of long-term demand in the care home sector, e.g. ageing population, bed spaces required etc.
  • Analysis of leading Independent & Voluntary Care Providers (care homes/bed-spaces by operator and by region).
  • Drivers of supply and demand in the care sector and key influences, e.g. analysis of care costs and funding.
  • Analysis of new and emerging areas of the care market, particularly care villages and extra care schemes.
  • Assessment of the increasing pressures facing the care homes sector, including an ageing population, staffing and
  • Competition for available land from housebuilders, student accommodation and hotel developers.
  • Detailed review of major construction and fit-out contractors and developers involved in care home construction -overview of contractor capability and contract experience.

Key areas of insight include:

  • Detailed assessment of healthcare construction output, new orders and contract activity together with forecast estimates over the next few years to 2023.
  • Detailed analysis of the care home development pipeline and the development opportunities available – the building programmes and expansion plans of leading independent and voluntary sector care home providers.
  • Detailed analysis of regional care home development ‘hotspots’ and opportunities.
  • Review of care home schemes under construction and those in planning – value of schemes and number of additional beds forecast.
  • A review of the leading contractors in the market by value of contracts won between May 2017 and April 2019.

Some of the companies included:

Four Seasons Health Care, BUPA Care Homes (CFG), Barchester Healthcare, HC-One, Anchor Trust, Sanctuary Care, Methodist Homes (MHA), Leonard Cheshire Disability, Community Integrated Care and Orders of St John Care Trust, NHS, CLC, Kier, Vinci, Seddon, Simons, Esh Build, Bowmer & Kirkland, Henry Construction Projects, Audley Group, Belong, Pozzoni Design Group, with Castleoak Care Developments, Cygnet Care, Malhotra Group, A2M Developments, Supreme Healthcare Ltd, Care UK, Audley Care, Pivotal Homes Group, Restful Homes Ltd, NPower, Vida Healthcare, Knight Frank, Care Quality Commission, Housing & Care 21, YourLife (McCarthy & Stone/Somerset Care), Your Housing Group, ExtraCare Charitable Trust, MHA, Sanctuary Extra Care, AnchorHanove, Morgan Ashley, Round Hill Capital, Ventas, Welltower Inc, Revera, HCP, – Anchor Trust, Sanctuary Care, Methodist Homes (MHA), Leonard Cheshire Disability, Community Integrated Care, Orders of St John Care Trust, Barchester, Oakdale Care, Community Integrated Care, Anchor, Avery Healthcare, Sanctuary Care, MHA, Orchard Care Homes, Priory Group, Ideal Care Homes (Sister Company), Nugent Care, Highpoint Care,

The Long-Term Care Sector in the UK

  • Sector size and structure – Long term care for the elderly by number of care homes and bed spaces.
  • Supply and demand in the care sector – Future demand for care home places; Regional Provision of Care Homes; Future Drivers of Demand; Care Costs.
  • The Extra Care Housing Sector – Overview; Extra Care Developments; Funding and Design for Extra Care Housing.
    Funding for the Long-term Care Sector – Social Care Spending; Funding Outlook.
  • The Independent Long-Term Care Sector – Sector Size, Value; Leading Independent Care Providers.
  • The Local Authority/Voluntary Care Sector – Overview and Sector Value; Structure and Size; Leading Voluntary Care Providers.

Construction Output in the Healthcare and Care Homes Sector

  • Overall Construction Output – Total Construction Output to 2023.
  • Value of Construction Output and New Orders in the Healthcare Sector 2014-2023.
  • Market Prospects for Healthcare Construction Output.
  • RMI in the Healthcare Sector 2014-2023.
  • Building Programmes and Investment in the Care Homes Sector.
  • Care Home Development Pipeline – Planning Applications; Care Home Construction Contracts; Care Home Planning Pipeline to 2023.
  • Regional Care Home Development Pipeline Analysis – Regional Development Hotspots; England – East Midlands; East England; North East; North West; South East; South West; West Midlands; Yorkshire & Humber. Also included are Scotland and Wales.
  • Building Programmes of the Leading Care Providers and contracts awarded.

Funding and Construction Issues in the Long-term Care Sector

  • Age & condition of care home stock in the UK.
  • An overview of care home costs.
  • Care Home size and categories.
  • Care Home design considerations.
  • Private healthcare investment in the care homes sector – Private care home financing and investment funds; mergers, acquisitions & transactions in the private long-term care sector.

Construction Supply in the Healthcare Sector

  • Top Contractors by Care Home Awards.
  • Leading Contractor Profiles, e.g. Castleoak; Lawrence Baker; LNT Care Developments; McGoff Construction; McLaughlin & Harvey; Metnor Group; Pochin; Stepnell; Walter Thompson; Bowmer & Kirkland; Henry Construction.

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, with substantial growth in the number of private nursing home places replacing large numbers of NHS hospital beds for both geriatric and mental illness care.

In the longer term, the care homes sector is expected to outperform the wider healthcare market due to an acute undersupply of appropriate accommodation together with increasing demand from an ageing population.

Over the next 5 years, demand for care homes places is expected to far exceed the number of bed space additions provided. This is in part due to the decline in bed spaces provided by the public sector and private sector building not meeting the new demand. Care home development continues to focus on locations which are characterised by a strong self-pay market where higher fees provide investors with a stronger return on capital. However, finding appropriate development sites in these areas remains constrained by land prices and competition from house-builders, leading to a shortage of affordable sites.

Despite the challenges currently facing the sector, the private care homes sector continues to perform and attract new investment. The reduction in value of the sterling has made the UK market more attractive to overseas investors, particularly those from China and Malaysia. New investment is also driven by the growing number of older homes no longer fit for purpose and the increasing demand as the population ages. Additionally, the proportion of people entering care with specialist needs is increasing and is likely to remain a priority for operators, with a rise in the incidence of obesity, diabetes, dementia and other neurological disorders. In a time of constrained public-sector finances, the private sector will play an important role in updating existing and delivering new care homes. Because of these factors, the care homes sector is set to outperform the wider healthcare market in the long term.

Contents Listing

1.1. INTRODUCTION 8
1.1 BACKGROUND 8
1.2 SOURCES OF INFORMATION 8
2. SUMMARY AND MARKET PROSPECTS 10
2.1 SUMMARY 10
2.2 MARKET PROSPECTS 12
3. ECONOMIC ENVIRONMENT 14
3.1 OVERVIEW AND OUTLOOK 14
3.2 KEY DATA 15
3.2.1 GDP 15
3.2.2 Inflation & Interest Rates 15
3.2.3 Employment & Wages 16
3.2.4 Household Consumption 17
3.2.5 Sterling 18
4. CARE HOME & HEALTHCARE CONSTRUCTION MARKET 20
4.1 OVERALL CONSTRUCTION OUTPUT 20
4.1.1 Total Construction Output to 2023 20
4.2 CONSTRUCTION OUTPUT IN THE HEALTHCARE SECTOR 22
4.2.1 Outlook for Healthcare Construction Work to 2023 22
4.2.2 RMI in the Healthcare Sector 24
4.4 BUILDING PROGRAMMES AND INVESTMENT IN THE CARE HOMES SECTOR 25
4.5 CARE HOME DEVELOPMENT PIPELINE 27
4.5.1 Planning Applications 27
4.5.2 Care Home Construction Contracts 29
4.5.3 Care Home Planning Pipeline 30
4.6 REGIONAL CARE HOME DEVELOPMENT PIPELINE ANALYSIS 31
4.6.1 Development Hotspots 32
4.6.2 East Midlands 33
4.6.3 East England 33
4.6.4 North East 34
4.6.5 North West 35
4.6.6 South East 36
4.6.7 South West 37
4.6.8 West Midlands 38
4.6.9 Yorkshire & Humber 39
4.6.10 Scotland 39
4.6.11 Wales 40
4.7 BUILDING PROGRAMMES OF LEADING CARE PROVIDERS 41
4.7.1 Market Activity 41
5. THE LONG-TERM CARE SECTOR IN THE UK 43
5.1 SECTOR DEFINITION 43
5.2 SECTOR OVERVIEW AND VALUE 43
5.2.1 Outlook for the Sector 44
5.3 SECTOR SIZE AND STRUCTURE 45
5.3.1 Long-term Care for the Elderly 46
5.4 SUPPLY AND DEMAND IN THE CARE SECTOR 47
5.4.1 UK Provision 47
5.4.2 Regional Provision of Care Homes 48
5.4.3 Future Drivers of Demand 50
5.4.4 Influences and Drivers of Demand 51
5.4.5 Care Costs 51
5.5 THE ‘EXTRA CARE’ HOUSING SECTOR 52
5.5.1 Overview 52
5.5.2 Funding and Design for Extra Care Housing 54
5.6 THE INDEPENDENT LONG-TERM CARE SECTOR 55
5.6.1 Sector Value and Size 55
5.6.2 Leading Independent Care Providers 56
5.6.3 Private Care Home Financing and Investment Funds 61
5.7 THE LOCAL AUTHORITY/VOLUNTARY CARE SECTOR 63
5.7.1 Structure and Size 63
5.7.2 Leading Voluntary Care Providers 63
5.8 FUNDING FOR THE LONG-TERM CARE SECTOR 66
5.8.1 Social Care Spending 66
6. CARE HOME STOCK AND CONSTRUCTION ISSUES IN THE LONG-TERM CARE SECTOR 68
6.1.1 Age & Condition of Care Home Stock in the UK 68
6.1.2 Care Home Costs 68
6.1.3 Care Home Size and Categories 69
6.1.4 Care Home Design Considerations 71
7. CONSTRUCTION MARKET SUPPLY LONG-TERM CARE SECTOR 73
7.1 LEADING CONTRACTORS & DEVELOPERS IN THE CARE HOMES SECTOR 73
7.1.1 Top Contractors by Care Home Awards 73
7.1.2 Leading Contractor Profiles 75
7.1.3 Other Company Profiles 80

 

Tables & Charts

CHART 1: NURSING & RESIDENTIAL CARE HOMES/BED-SPACES BY TYPE OF PROVIDER IN 2019 (%) 10
CHART 2: GDP DATA – 2015-2019 – KEY CONSTITUENT ELEMENTS 15
CHART 3: CPI INFLATION AND BANK OF ENGLAND BASE RATE, 2008-2023 16
CHART 4: AVERAGE WEEKLY EARNINGS DATA – GB – TOTAL PAY – 2014-2019 (SEASONALLY ADJUSTED) 17
CHART 5: PDI & SAVINGS RATIO AT CURRENT PRICES 2008-2023 18
CHART 6: EXCHANGE RATE FLUCTUATIONS 2015-2021 – STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 19
CHART 7: OUTPUT – NON-RESIDENTIAL CONSTRUCTION BY SECTOR (GB) 2014 TO 2023 – BY VALUE (£BILLION AT CURRENT PRICES) 20
CHART 8: CONSTRUCTION OUTPUT BY SECTOR 2018 21
TABLE 9: CONTRACTOR’S OUTPUT IN THE HEALTHCARE SECTOR (PUBLIC & PRIVATE) 2009-2018 (£M) 22
CHART 10: HEALTHCARE CONSTRUCTION OUTPUT 2014 – 2023: BY VALUE (£M AT CURRENT PRICES) 23
TABLE 11: HEALTHCARE RMI MARKET 2014-2023 (£M) 25
CHART 12: CARE HOME PLANNING APPLICATIONS BY NUMBER AND VALUE (£M): Q1 2017 – Q1 2019 28
CHART 13: CARE HOME PLANNING APPLICATIONS YEAR TO APRIL 2019 BY REGION 29
CHART 14: CARE HOME CONTRACT AWARDS Q1 2017 – Q1 2019 BY VALUE (£M) AND NUMBER OF CONTRACTS (PROJECTS >£1M) 29
TABLE 15: CARE HOMES – CONTRACTS AWARDED BY REGION; VALUE AND NO. BED-SPACES: (PROJECTS > £1M) (YEAR TO APRIL 2019) 30
CHART 16: VALUE OF THE UK CARE HOME DEVELOPMENT PIPELINE 2019-2023 BY REGION (%) 31
CHART 17: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY REGION: BY NUMBER OF BED-SPACES 32
TABLE 18: EAST MIDLANDS: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 33
TABLE 19: EAST ENGLAND: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 34
TABLE 20: NORTH EAST: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 35
TABLE 21: NORTH WEST: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 35
TABLE 22: SOUTH EAST: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 36
TABLE 23: SOUTH WEST: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 37
TABLE 24: WEST MIDLANDS: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 38
TABLE 25: YORKSHIRE & HUMBER: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 39
TABLE 26: SCOTLAND: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 40
TABLE 27: WALES: CARE HOME CONTRACTS IN THE PIPELINE 2019-2023 BY COUNTY (BY VALUE OF PROJECTS AND NUMBER OF BED-SPACES) 41
TABLE 28: LEADING PUBLIC AND PRIVATE PROVIDERS OF LONG-TERM CARE BY NUMBER OF PIPELINE HOMES AND BED-SPACES TO 2021-22 42
CHART 29: UK CARE HOMES MARKET – SECTOR REVENUE (INDEPENDENT/PUBLIC SECTOR) BY % SHARE 2018 43
TABLE 30: UK LONG-TERM CARE MARKET BY OWNERSHIP TYPE – NUMBER OF CARE HOMES/BED SPACE 2017 AND 2019 46
CHART 31: NUMBER OF CARE HOME RESIDENTS 2009 – 2019 (‘000) 47
CHART 32: FUTURE DEMAND FOR CARE HOME PLACES – EXPECTED DEMAND VS. CURRENT ANNUAL SUPPLY: 2019-2030 48
CHART 33: NUMBER OF CARE HOMES (ALL TYPES) IN THE UK BY REGION 2019 49
CHART 34: NUMBER OF BED-SPACES IN CARE HOMES (ALL TYPES) IN THE UK BY REGION 2019 49
CHART 35: PROJECTED INCREASE IN UK POPULATION IN AGE GROUPS (65-74; 75-84; 85+) 2016 – 2081 51
CHART 36: EXTRA CARE/HOUSING WITH CARE MARKET: NO. UNITS 2008-2018 (‘000) 53
TABLE 37: EXTRA CARE HOUSING – LEADING PROVIDERS BY NO. UNITS 2018-19 54
TABLE 38: HCA CARE AND SUPPORT SPECIALISED HOUSING FUND (CASSHF) 2018-21: SUCCESSFUL ALLOCATIONS BY REGION 55
CHART 39: PRIVATE LONG-TERM ADULT CARE MARKET BY VALUE 2013-2023 (£BN) 56
TABLE 40: LEADING 20 PRIVATE PROVIDERS OF LONG-TERM* CARE BY NUMBER OF HOMES AND BED-SPACES 2018-19 58
CHART 41: NURSING & RESIDENTIAL CARE HOMES BY OWNERSHIP TYPE (%): 1990-2019 63
TABLE 42: LEADING 20 VOLUNTARY SECTOR PROVIDERS OF LONG-TERM* CARE BY NUMBER OF HOMES AND BED-SPACES 2019 64
CHART 43: INDEPENDENT CARE HOME STOCK BY AGE OF BUILDING 2019 68
CHART 44: CARE HOME OPERATING COSTS AS A % OF TOTAL REVENUE 2019 69
TABLE 45: DESIGN CHANGES IN NEW BUILD CARE HOMES 70
TABLE 46: TOP 25 CONTRACTORS & DEVELOPERS IN THE CARE HOMES SECTOR – BY NUMBER, VALUE (£M) AND SIZE OF CONTRACTS AWARDED MAY 2017 – APRIL 2019 73

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