AN OUTSTANDING OPPORTUNITY IN THE CARE HOME SECTOR

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Situated in a market town in the heart of Norfolk, Lyle's Care Home has been run by the same management team for over 14 years with the aim to give: ‘an individual centered care which is tailored to achieve their maximum physical, psychological and social potential’ There are 14 en-suites and six with washing facilities, a conservatory, Library, Sitting room and Dining room and two country gardens for residents. Along with many activities including bingo and skittles, the home offers pamper sessions and encourages the interaction with animals which range from dogs to visits from the Norfolk Wildlife Encounters who bring beautiful owls and hawks.

 

The progressive rise in life expectancy in the UK, as in other developed countries, means that there are many more  people who are older than 65. At the same time, the number of care homes in the UK has decreased by more than 50% in the last decade, from approximately 46,500 facilities to about 21,000, as a result of the government’s decision in 2008 to largely stop subsidizing care homes. These two factors when put together have led to a high increase in demand -and, in turn, created this outstanding investment opportunity.

 

A LARGER AGEING POPULATION A HIGHER DEMAND FOR BEDS

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Today there are more elderly people living in the UK than ever before. The Office for National Statistics predicts a 36% growth in persons aged 85+ between 2015 and 2025, from 1.5 million to 2 million. This is expected to lead to a substantial increase in demand for care home services. The care homes sector is worth around £15.9 billion a year in the UK, with around 410,000 residents (2017).

 

WHY INVEST IN CARE HOMES

 

Care home investments are suitable for investors looking to expand their portfolios, or for those that are attracted to ethical investments - one that aligns with personal principles or contributes to societal and environmental causes. Care homes are also a perfect investment opportunity for buy-to-let investors as they offer regular income payments with no ongoing fees and are fully asset-backed.

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The large growth opportunity in this investment option is largely down to the current high demand within the UK care home sector, which is due to an increasingly ageing population. The Office of National Statistics (ONS) predicts that circa 20.7% of the UK’s population will be over the age of 65 by 2027, and this is simply a demand in which the government are struggling to keep up with when it comes to providing the elderly with care and accommodation.

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As a hands-off, high-yield investment, investing in care homes is a wise choice for many. The healthcare sector offers diversification as well as a constant, solid investment rationale. As a popular alternative to standard buy-to-let property, care home investment also comes with a promising outlook and low volatility thanks to exceptionally high demand and low supply. Many investors also appreciate the opportunity to invest in a physical asset without any need to manage tenants or pay high agency commissions.

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If we look more closely at the supply-demand argument, the case for care homes becomes even stronger. The UK has an ageing population, and the over-85 age group are the fastest growing demographic. Thanks to key advances in modern medicine as well as increased awareness of the need to adopt healthy habits throughout our lives, life expectancy are growing all the time. However, the increase in life expectancy has also seen a sharp rise in the number of elderly people who are “highly dependent”.

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As Britain's population ages and the shortage of available bed spaces in care homes persists, the demand for existing beds continues to be strong. Investors can achieve good returns whilst also making a difference to the community.

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NO OFF PLAN HEADACHES

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As Lyle's house is already completed there are no off plan headaches. The entire buying process is handled by U.K solicitors and the units are fully registered with the UK land registry.

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• Care Home in South East England (Norfolk)

• No off plan headaches

• Established in 2007

• Returns are 10% Net paid quarterly for 25 years

• No hidden costs

• Only 20 rooms available

• Very in demand sector

• 250 year lease registered with HM land registry

• 110% buyback from year 6 increasing each year to 125% buy back at year 25 (Optional)

• Received an outstanding 9.8/10 reviews from carehome.co.uk 

• Previously won Top Care Homes in the East Of England award