An Introduction to the UK Care Market
Select Portfolio recently ran a three-part Care Webinar series to discuss the current state of the UK care market, UK care homes and future projections within the care sector.
The first part of the webinar series was ‘An Introduction to the UK Care Market’ which gave a helicopter view of the current care market. In his presentation, our Marketing and Sales Director, Michael Reilly, focused on four key areas:
Current UK Population
The number of people aged 65 and above in the UK has increased by over 1 million people since 2005. Life expectancy has increased steadily a since 2005, however according to the Office for National Statistics the average disability free life expectancy has largely remained unchanged since 2005.
Also explored briefly in this webinar is dementia in which 280,000 elderly dementia sufferers presently reside in UK care homes. Dementia is one of the leading causes of disability in later life and by 2025, 1 million people in the UK will be expected to have the condition and over 2 million people by 2051.
Analysing the current UK population, Michael stated “it is experiencing a real surge in demand driven by an ageing population but also being driven by the needs of the aging population. According to the Lancet Medical Journal both women and men are going to spend twice as long in care as they would have done two decades ago, meaning that the demand for care home facilities is higher than ever.”
Michael states, “the care home sector is a highly regulated sector; you have a statutory body that is inspecting, monitoring and regulating care home providers.” Each country within the United Kingdom has its own established quality regulator of care homes and for England, it is the Care Quality Commission.
Care Quality Commission
The CQC is an independent regulator of health and adult social care in England. Their objective is to ensure health and social care services provide individuals with “safe, effective, compassionate, high-quality care” (Care Quality Commission 2017) and encourage care services to improve.
“Before a care provider can carry out any of the activities that we regulate, they must register with us and satisfy us that they meet a number of requirements” (Care Quality Commission 2017). A care home provider must be able to ensure fundamental standards of safety for their patients and the CQC’s findings and ratings are published to help people find a suitable care home. Regular inspections are carried out to maintain the levels of standards and the CQC have the right to remove funding and shut a care home provider down if these standards are not met.
433,000 people occupy care home places across the UK in which 41% are entirely self-funded and 37% are fully funded by the public purse.
By law, local authorities are required to offer local-authority funded individuals at least one suitable care home place that will meet the elderly individual’s needs.
Ongoing funding of care is a political hot potato as witnessed by the “dementia tax” debacle before the last election, however with over 55’s financial specialist key Retirement noting that retired homeowners in the UK have a combined property wealth of £1.054trillion it is not difficult to see that governments of any shade will look at this asset wealth as a route to fund social care in the future.
Structure of the Care Market
Almost 80% of residential care is provided by the private for-profit sector; without this investment, the UK care sector will collapse. Visit our UK Care Home Investments Page or watch our UK Care Home Investments Video to find out about more about the potential of care home investments.
The UK care home sector is worth around £15.9 billion annually. Within this sector, there are 454,000 beds in 11,293 care homes; this means that an estimated 95% of the occupancy is full, forming a strong appeal for new care home developments.
70% of the market is currently operated by just under 5,500 care providers. These providers run a small amount of homes and a limited amount of beds, producing a significant scope for consolidation. Knight Frank estimate that 6,000 beds are at risk of closure over the next 5 years as care facilities with less than 25 beds are most vulnerable to economic pressure.
‘An Introduction to the UK care market’ webinar is available to watch here.
The second part of this blog post will be published next week, focused on the part 2 of the care webinar series – ‘In Conversation with Qualia Care’ featuring Phil Whitaker, Managing Director at Qualia Care.