Getting older is something many people prefer not to think about, but ageing is not only a fact of life, but an important fact for investors to consider.
The UK is ageing. Life expectancy is increasing. The Office for National Statistics predicts that one in four people will be aged 65 and over by 2050 – a 56.3 per cent rise from four years ago. By then, 8 million people will be at least 80 years old.
All these people will need somewhere to live – and to provide suitable care for them. The care home sector is already working hard to meet demand. It contributes more than £14 billion to the UK economy every year, according to AMA Research Ltd.
The majority of care services are funded by the government, with £3.8 billion earmarked last year for joint NHS and local council decisions about funding health and care services. As the population ages, the current supply will be increasingly placed under strain. Significant numbers of current care homes falling below the current required standard therefore existing stock will need to be brought up to standard and new stock required to meet the demand. For now, private care homes are stepping into the breach to help look after Britain’s older generations.
One such development is Wagons Way, a nursing facility in Washington, North East England. Wagons Way has 58 beds and is fully open and operational, but will soon undergo a rolling refurbishment to transform it into a leading facility specialising in dementia care, explains UK investment specialist Select Portfolio.
With around 800,000 people in the UK currently living with a form of dementia and this number due to more than double in the next 15 years, private investors are vital to funding the facilities and services required for this growing sector.
Wagons Way is located in an area where needs are highest: based on 2011 population estimates, 17.4 per cent of people in the North East are over the age of 65 – significantly above the national average. With experts projecting that in the next five years, the area’s population could grow 4.9 per cent to 2.7 million, the number of elderly residents is only set to increase.
The industry leading facilities and services will also draw residents in from a wider area, where demand far outweighs current supply.
An ethical ROI
Investors can purchase an individual room within the nursing home now, helping to maintain both levels of supply and quality of care. With demand for such specialist services growing, this investment not only gives something to the country’s mature population, but also gives something back to buyers. Investors generate circa 8 per cent rental income per annum for 25 years, with a buy back option up to 125 per cent in years 20 and 25, and a potential ROI of up to 225 per cent.
Investors have a choice of two purchase options: buying a unit with full cash input of just £58,500 or buying a unit with a lower cash input of £53,820 by offsetting the difference against their first year’s rental income. (All returns from year two onwards are paid annually in arrears.)
With no ongoing fees or charges and an ethical ROI made possible by a sustainable model that thoughtfully balances the needs of all parties, Wagons Way demonstrates that by investing in the care home sector today, you can make a difference for the future – and know that your finances are being looked after too.