UK care home operators could see costs rise by up to 30 per cent this year driven by labour, supply and finance, according to global property adviser Knight Frank.
A survey covering 98,000 beds across 781 towns and cities found an estimated 12 per cent rise in agency expenses combined with insurance and utilities becoming more expensive and challenges with supply chains that are further impacting build costs.
This culmination of issues is predicted to result in a lag of new beds throughout 2023 and 2024, it said.
“As we continue to recover from the pandemic there is a sustained demand for high-quality beds, and increasing attraction from investors and pension funds. However, increased costs and disruptions in the supply chain are posing significant challenges to the development of the much-needed quality new build care homes,” said Knight Frank head of healthcare Julian Evans (pictured).
“We currently face the perfect storm posed by rising costs of labour, supply and finance and if we do not act could risk a crisis in care provision,” he added.
Knight Frank predicts that by 2035 there will be a shortfall of 58,000 beds across the sector while the growth in the UK’s elderly population is such that by 2050 an additional 350,000 people will potentially need an elderly care bed, almost doubling the level of bed demand within 30 years.
“Urgent action from the government is needed to support this essential sector as it strives to deliver for our ageing population,” said Evans.