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JLL estimates that there will be a shortfall of nearly 3,000 care home beds in 2018 based on the current development pipeline and anticipated increase in demand due to growing demographics.
Over the last 15 years, there have been approximately 7,000 new care home beds built each year. However, increasing demand from an ageing population means that 14,000 beds need to be built each year for the next decade. Even if this rate were to be achieved, the number of closures in the sector is making this task even more challenging. Since 2014, over 21,400 beds have closed across the UK.
Since 2002, one in five beds have been built in the South East, largely a result of the region having the fastest growing elderly population and high levels of wealth, in particular housing equity. Despite this, the number of new beds (743) has been offset by the number of closures (2,072) last year.
With about 77% of all care home beds across the UK built before modern quality standards were adopted in 2002, there is an urgent need for new development to meet demand and improve living standards for future care home residents.
James Kingdom, head of alternatives research at JLL, commented: "Even before we take into account the impact of bed closures, the care home sector needs to double the delivery of new beds. Demand for private pay stock set to increase across all regions of the UK, not just the wealthy prime markets, as a result of historic house price growth and no change in the threshold for publically funded care since 2010. The election showed what an emotive subject social care and how it is going to be funded can be. But it is essential that the government reaches a sustainable solution as to how social care is to be funded in a way that doesn't pass the burden to a shrinking working age population."