ALDRIDGE CARE HOMES - A NATIONWIDE CARE HOME AGENT
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"ENTHUSIASM CONTINUES IN THE CARE HOME MARKET”
In conversation with Julie Hopkins of the Buyacarehome/Ownacarehome Group
What is your outlook for the care home market?
What is your outlook for the care home market?
Throughout 2022 the interest for good quality Care Homes has remained robust with interest from new Care Home Buyers to the growing Independent Multisite Care Home Operator developing alongside the Corporate Operators.
It is predicated that Care Home sales in the UK will continue at a decent pace, with demand outstripping supply for the higher end top quality businesses. With the market unlikely to slow due to recent rising interest rates, we believe the industry will remain active for the remainder of the year moving into 2023.
How has the Care Home marketplace performed year to date?
Quality Care Homes coming to the marketplace are acquired quickly with many offering single en-suite bedrooms, spacious accommodation or room to expand, with a good range of facilities and staff continuity with a good regulator record.
A track record of good levels of occupancy and resilience during recent years contribute to a stable and upward trajectory in EBITDAR and hence valuation levels.
During 2022, it would appear there have been improvements in business trading positions throughout the UK, with better recovery prices being achieved since the pandemic. This is attributed to improved occupancy levels as Care Homes opened their doors again to new Residents. Also, the overcoming of uncertainty since the nationwide vaccination programme was implemented with the Autumn Booster Programme currently being implemented.
What are your thoughts on the trajectory of interest rates?
Other current news is, of course, rising interest rates, with indications that rates will continue to rise to curb inflation. This may seem intimidating for buyers, but we need to remember that base rates are still at historically low levels in comparison to the 1980’s when rates reached between 10%-15%. This gradually decreased into single digits in the 1990’s and then with a global recession in 2008 all the way down to just 2%.
Announced on 22 September 2022 interest rates have now risen to 2.25% as the Bank of England tackles inflation.
What impact do you think energy prices will have on the Care Home Market?
Price caps will certainly be needed and most welcomed by operators, with the overall message being to accelerate domestic energy supply to ease the burden. It is another area where future-proofing supply will be required but then again, the Care Home industry has always had future proofing challenges, which has never deterred astute buyers who continue to see the Care industry as unique and special.
For more information on Buying or Selling a Care Home please telephone Michael Aldridge on 0330 1232066 or you can E-mail michael@aldridgecarehomes.co.uk Website - www.aldridgecarehomes.co.uk