UK Care Home Market: A Worthy Investment

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With the median age rising globally, the same reality is happening in the UK. About 17% of the country’s population is made up of people aged 65 and over. With the numbers ever increasing annually, it is projected that by 2040, one in every seven people will be aged 75. By 2039, those over 85 are expected to double from the 2014 data of 1.4 million. All in all, this points to the fact that there is a high demand for care homes in the country.

For people that are interested in the investment prospect of the care home market as an investment class, property specialist Experience Invest assures that there is a level of certainty as far as income goes. The reason for this is because at present, a UK resident that requires nursing care and has a personal asset worth below £23,250 can expect the government to cover the full cost of his care. Not only does this cover dementia care, but also infirm care. What makes this a worthy investment option is because those that have the means to pay will pay and those that cannot will be subsidised by the government.

Investors that are interested in making direct investments in the sector can start by purchasing a care home suite in luxury retirement homes or go for a nursing catering aimed for dementia patients. For both these instances, the property will be leased back by the operator of the care home to the investor often at net yields around 10% per annum. The operator will also be responsible for running the premises as well as in renting the property usually on a long lease of about 10 years or more.

Investments that are hands off and high-yielding have since become a popular option among investors from overseas in recent years. The reason for this is because they get to take advantage of a property that is fully managed while at the same time, will pay them with a regular income. This makes it a good option for investors that are hoping to diversify their portfolio.

Luxury care homes usually attract residents that are self-paying as a result of higher rates for weekly rentals. These are properties that are often aimed at people who are 65 years old that want to downsize as well as move into a setting where there is a community environment. There has been a consistent demand for luxury care home suites especially in the affluent areas along the south-west of the country.

As with any investment, there are always going to be risks. For instance, there is the shortage in nursing care and in qualified nurses. The costs are also likely to be driven up by minimum wages and inflation. This is also the reason why there are many property managers that will only lease at 8% instead of the ideal 10%. Learn more about why care homes are good investments by reading about Experience Invest online.

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