Care home investments are a continuously growing opportunity for investors seeking an alternative to traditional buy-to-let property. During the next twenty years there is an expected increase of 106% of the over 85 population. The growing demographic will naturally increase the demand of specialised care for the elderly – a demand that the local authorities are not able to keep up with.
Local authorities and the NHS are currently responsible for funding the majority of care within the United Kingdom. The £2.45 billion deficit in the 2016 NHS trust resulted in the needs of the elderly being put at risk. Additionally, due to the economic climate the percentage of residents on social care budgets have also increased. This situation has created a lucrative opportunity for private investors to help resolve the lack of supply in the care home industry with an investment that is not only ethical and recession-proof but also vital to support the UK’s social infrastructure. The opportunity available in care homes around the country is for investors to purchase individual units or otherwise known as care home suites on a leasehold basis.
The opportunity for investment within this industry starts with a property operator identifying a care home that requires a turnaround, refurbishment or an already high performing establishment that is being sold. The operator would then purchase the entire care home and convert the existing home into a specialist establishment to meet the growing demand. The operator would then divide individual units or rooms into leaseholds. Investors are then invited to purchase the individual units with a 250 year leasehold. With this, the investor is granted complete ownership of their investment, including registered title deeds on the UK Land Registry. The individual units are then leased back to the care home operator, providing investors with high yielding returns of 8%-10% per annum with quarterly payments. The operator employs a team of industry specialists to manage the property and oversee the day-to-day operations, making this a hassle-free and hands-free investment with regular passive income.
Investors benefit from a secure investment which is regulated by the Care Quality Commissions (CQC) in England and the Care Inspectorate Wales (CIW) and that has been recognised for its excellence in The Parliamentary review. Also, all of HyLife’s care homes are complete and operational, meaning that investors are able to avoid any development risk.
Care homes don’t just offer a lucrative and ethical investment, they also provide generous guaranteed buy-back options from just three years of ownership with capital growth. See the table below for the breakdown on buy-back options available as well as total returns based on buy-back uplift and yearly return.
As you can tell, UK care home investments are quickly becoming a popular alternative investment option for investors that are looking to invest in a high yielding, asset backed product. In particular, investing in a market with continuous demand, short and long term assured returns as well as low risk.