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Investment Opportunity in UK

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10%

Net Returns

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The UK social care system

The scope of social care in the UK is wide ranging and 

can include anything from providing help to people to get up 

in the morning in their own homes, to round the-clock support 

in a residential, nursing or specialist dementia care home. 

All care providers in England are inspected by the CQC and in Wales by CIW . 

The findings are published on both the CQC and operator’s website, 

allowing the quality of care offered by each provider to be reviewed on 

a home-by-home basis.

Introduction

When people think about property investment, the UK care industry may not be on most people’s radar or at the top of a portfolio wish list, and yet care home investments can offer a great alternative

buy-to-let opportunity, with assured returns and the opportunity for capital growth.

Strong yields & stable long-term investment.

Cushman & Wake field 1 predicts that the sector will enjoy substantial growth in 2019, as healthcare assets become more mainstream among investors,

OPPORTUNITY

HIGHLIGHTS

The growing need for care

The over 85 age group is now the fastest growing demographic in the UK, as we all live longer through improvements in our health diets and preventative care. Over the next 20 years the age group is set to grow by 106%, to over 2.6m people.
But recent government changes such as a new stamp duty on buy-to-let purchases, plans to phase out all tax relief on mortgage interest by April 2020
Opportunities from care developers offer investors a familiar sales and leaseback model for long-term investment that generates good rental yields and capital growth, with the bonus of no stamp duty to pay.

The solution for sustainable care


Different providers of care have adopted different business models and strategies in response to the current situation in care.

Whilst some care home providers have consolidated their offering into key locations focused on attracting self-funded private fee paying residents, other providers have remained committed to publically-funded care residents, becoming more efficient and capitalising on gaps in the market driven by local authority need.
For an investor looking for a commercial property investment, this represents a way to invest in care, similar to a hotel or student property where an operator assumes responsibility for both the ongoing occupancy of the property and the day-to-day management of the facility.

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Social care ‘stellar’ performer

Over  the  last  12  months,  the  imbalance  in  care  bed  supply  and demand has attracted significantly more investors in to the arena,

Healthcare is likely to be the ‘stellar performing asset class of 2018’ and is attracting a truly global audience, according to a report by leading property consultancy, Knight Frank

An increasingly popular model for investment

Private investment through a sale and leaseback  model  is  a  well-established funding method in the property sector that  allows  developers  to  raise  funds to purchase new property (acquisitions) without the need for large bank loans and the subsequent bank interest debt.

Finding the right investment opportunity

For the private investor, now is an excellent time to consider investing in UK care. There are a growing number of innovative developers offering great buy-to-let investment opportunities within the UK care sector.

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The growing need for care

The UK’s population is growing – and growing older. Estimates from the Office for National Statistics (ONS) suggest that by 2050 one in four people will be aged 65 and over (a 56 per cent increase from 2012), with 8 million people aged 80 and over.

Although medical advances are extending our lives, it doesn’t necessarily follow that we all live with good health as we age. This is reflected in the rising levels of dementia in the UK, with more than 850,000 now living with dementia costing the UK £26 billion a year.4

Pressures on traditionally-funded care

Traditional models of social care are under increasing pressure.
The implementation of the National Living Wage6 in 2017, coupled with

financial pressures on local authorities has put added strain on the care industry. Rises in providers’ costs and the squeeze on local councils’ budgets are leaving some care providers in an unsustainable position

It’s been well publicized that several high-profile care providers have already gone out of business or were forced to sell off care homes in recent years, weighed down by debt and hefty interest payments. Many local authorities across the UK have also closed their care homes due to the government’s squeeze on public sector funding.

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