Retirement Home Shortage Worry For The UK

0.6% of housing in the UK is private retirement housing – a number that needs significantly improving for an ageing population. Analysis from Knight Frank shows the demand from older people is far higher than the current stock levels. The number of homes classed as retirement housing, which ranges from care homes to age-restricted developments, counts for 2.6% of stock but only 0.6% of these are private retirement housing. Estimated build for new units in 2016 is thought to be at 5,500 – adding to the 715,000 current stock – which accounts for around 3% of delivery. There are already 7.8 million people over the age of 65 or 18% of the population and 12% over 70. Read more on 24housing.

Residents Hit By Care Homes Rip-Off

Middle-class families are facing rip-off tactics from care home owners desperate to stay in business, according to a report. The ratio of care home residents who pay their own bills has risen to 41 per cent, and sharp practice against them by owners and operators has been multiplying, Age UK said. The tricks used to extort thousands of pounds from residents include demands that their families should take responsibility for paying their bill, and long notice periods that mean families must pay for weeks of care that have not been given. Families also face arbitrary hikes in fees; and unexpected charges for extras such as providing entertainment or hospital visits. Read more on the Daily Mail website.

Care Home Rooms Now Cost More Than £30,000 A Year

The financial pressure on older people and their families when trying to pay for social care is growing, with the average cost of a room in a care home now more than £30,000 a year. The cost of a care home room has risen by 5.2% in the last year, more than 10 times the average increase in pensioners income, according to a report by Prestige Nursing and Care. The figures highlight the financial crisis in the care home industry and the impact this is having on older people and their families. Four Seasons Health Care, Britain’s biggest care home group, reported a pre-tax loss of £264m last year and that it was struggling under the weight of more than £500m of debt. Read more on the Prestige website.

Ministers Urged To Examine New Buy-To-Let Boom In UK Care Homes

Private investors are being enticed to purchase rooms in UK care homes on a buy-to-let basis with the promise of large profits and rental income. The Bureau of Investigative Journalism has found hundreds of rooms being offered for sale for as much as £85,000 each. They offer “guaranteed” rental income of around 10% annually and a total return on investment of up to 188% over 10 years. Such buy-to-let room schemes are not regulated by the Financial Conduct Authority, while the Care Quality Commission, which oversees standards in care homes, says it does not have responsibility for providers’ financial sustainability. Servicing such high fixed returns could squeeze funds available for providing the actual care. Residents could also have to move if the care homes failed to pay their debts to investors and were forced to close. Read more on the BIJ website.

Latest Buy-To-Let Craze: Buying Rooms in Care Homes

It’s buy-to-let, but with a special twist. You buy a room in a care home and let it to an elderly person in the later or final stages of their life. This might strike some as distasteful. All forms of property investment seem today to be controversial. But care home investments can be highly profitable, offering annual returns of 10pc or more – and the opportunity for capital growth. There is a sudden profusion of care home investment schemes chasing savers’ cash. They are being marketed by developers who claim private investors can buy rooms in newly-built homes for as small an initial outlay as £35,000. Read more on the Daily Telegraph website.

Council Pays To End Care Home PFI Deal

Southwark Council is buying out a long-term contract with Anchor Homes, in a move that will save the council around £12m over the next 12 years, while continuing to provide the same quality of service to all care-home residents, who will continue to benefit from the new facilities brought in as part of the original deal.  In December 2000, the council arranged for Anchor to invest £12m into the rebuilding and refurbishing of four care homes in Southwark as part of a PFI deal lasting 25 years. However, in a show of partnership and co-operation, Anchor has agreed that Southwark Council can complete the repayments early, saving the authority nearly a million pounds a year in fees – around £930,000 per year - and allowing it to take on ownership of the buildings and responsibility for the repairs and maintenance.  Read more on the Southwark Council website.