Care Home Investment Set To Remain Stable Option For The Long Term

Recently available to private investors, care home investment is proving to be a

popular avenue for those looking for a low risk opportunity within the healthcare property sector. Reliant on the healthcare industry, experts have stated that this form of investment will benefit from a variety of socioeconomic factors, securing its strength in the longer-term.

The provision of healthcare in relation to the purpose of care homes is dependent on progressive factors. These include an ageing UK population, the rise in dementia cases, and sustained non-discretionary spending, even during times of economic uncertainty.

This month, amid predictions that the number of those affected by dementia will rise from 750,000 to over 1 million by 2021, the UK government has launched a major awareness campaign aiming to reinforce the importance of dementia care. It specifically urges the detection of the early signs of dementia.

In particular, Yorkshire, a county in the north of England, faces a substantial increase in the number of dementia sufferers. The current figure of 62,7832 is set to rise by 32% over the next ten years. Care homes offering specialist care for dementia sufferers are already in short supply, with only 1 bed available for every 4 in need for those over the age of 80.

According to figures from the Office for National Statistics, the number of people aged 65 and over has increased by 1.7 million over the last 25 years. Experts have forecasted that by 2035, this number will increase by 23%, helping to emphasise the demand for long-term care home investment.

Irrespective of challenging macroeconomic conditions, the interdependence of the healthcare industry and healthcare property sector is strong enough to withstand even widespread volatility, owing to the sheer demand from a growing demographic requiring round-the-clock care.

Factors that support the occupancy rate of care homes, unlikely to diminish over the long-term, sustain this market in the face of other asset classes that are more vulnerable to the shifting sands of the economy.

This is evidenced in the high occupancy rates of UK care homes, averaging in excess of 90%. This is at a time when demand is already outstripping supply and when demand is set to burgeon over the next decade. UK care homes exist out of necessity. Coupled with low volatility in the sector, healthcare property will remain buoyant and unremitting in the long-term.

by: Melvin C. Zook

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