COVID-19 AND ITS IMPACT ON CARE HOME INVESTMENTS - first-uk-properties

2020 was a devastating year for people across the globe as Covid-19 caused a crisis that no one expected or even foresaw. The United Kingdom had it as bad as anyone with over 125,000 people losing their lives to the deadly virus and many of them occurring perhaps avoidably in care homes across Britain. It would be true to say that the health care sector has taken a major hit.

However, there is something of a silver lining to this very dark cloud and it exists in places where relationships are built between medical and social commissioners, innovation-led investments are encouraged and where there is a movement towards personalised models of care and away from those that are condition-centred.

Even in this Covid-impacted world, we find ourselves in, care home investments still represent a sound financial and social proposition when dealing with a particular calibre of care property. Let’s dig into the reasons why this is the case.

If the Coronavirus pandemic has caused anything in the world of care home investments, it’s a polar shift to sustainability-based private funding and an Environmental, Social, and Governance (ESG) framework. In this new landscape, investors are looking to reattribute their assets into operators that display a culture for positive impact.

From the outside, the healthcare industry has been suffering from major issues relating to how social and medical organisations collaborate. These issues often result in a fractured experience for the patient and a compromised ability to provide a safe and nurturing environment. They also contribute to antiquated practices in UK care homes, marked understaffing and a significant lack of available funding.

A fundamental reason why selective care home investments remain a viable option is the growth of the elderly population over the coming years. The number of seniors with prevalent health conditions is set to grow hugely in the next 20 years, with 1.2 million expected to exist by the year 2040, combined with a shortage of care beds available in the UK.

In this scenario, value-added private equity investments represent the only sensible approach along with funding for technological support enhancements for systems such as those that help with the care of those living with dementia. This is what is meant by a person-centred approach.

Regardless of the fact that the current economic situation in the UK is less than ideal, investment in care homes remains a highly sustainable and ethical option that offers high-returns for minimal risk. As a result, there are signs that ESG entrepreneurs are shifting away from unstable sectors such as transport, retail and hospitality as a result and favouring care homes.

As things stand, UK care home occupancy is already sitting at over 80% and the number of admissions is accelerating all of the time. Whether talking about smart IoT technology that enables companies to remotely monitor those in their care or digital social and health care systems that allow precise care decisions to be made based on real-time data, investors are favouring care homes that operate using these improved TEC amenities.

Much of what is possible with cutting edge care tech is down to the power of AI and it’s enabling people to receive the best reablement and preventative care available. What’s more, it’s technology that greatly reduces the cost of providing this care, meaning that it’s far more accessible now to more people than it has ever been before.

The viability of care home investments in the UK relies upon the continued existence of facilities that use these technologies at the same time as offering virus-proof healthcare. This calls for the prioritisation of reinvestment and restructuring of UK care homes so that they remain operating during these challenging times.

The unprecedented demand for care home places in the UK has fundamentally changed how funding for care home investments is obtained, with traditional supply and financing routes no longer representing a sensible path. There are expected to be approximately 28% more people over the age of 85 in a decade’s time, so the situation will continue to become more acute with each passing year.

The fact is that investing in care homes offers double the return on investment provided by standard residential property investment, however, operators still need to work to attract funding. To do this, they need to offer investment incentives to those who are searching for a ‘hands-off’, ‘value-added’ opportunity. This could take the form of guaranteed buy-backs, assured payment schedules and being able to offer tech-based holistic care infrastructure.

Sustainable investments rely on every element working well and there is perhaps no more important factor in this equation than the care workers who live on the front line. The model’s efficacy requires that support is provided for health care workers who are feeling the intense pressure that’s being placed on them. According to a 2019 survey, almost half of UK healthcare providers are experiencing work-related stress, which in itself is not sustainable.

Care workers are human beings and they need financial and emotional support, which will require the implementation of a comprehensive strategy to provide it. Care home investments[1] are only viable if those providing the care are able to give it their full effort and a stressed and over-burdened workforce is not the platform on which to build success. Keyword

So, as you can see, UK care homes still very much represent a viable option for investment, but only if the facilities in question are forward-thinking with regards to new care-related IoT technologies and have both their patients and their staff at the forefront of their thinking.

Covid-19 has impacted everyone and it has changed where the goalposts are, but investors looking for a sustainable option that offers a meaningful return on investment need look no further than care home investments.

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