Dementia Adds to UK Housing Supply Woes

Care and support are what they need from us.

In  a previous post, we talked about the ageing population in the UK and the implications it has on housing and opportunity it offers property investors.  One of the main issues afflicting the ageing population in the UK is dementia — a crippling disease that is now the leading cause of death in England and Wales. Caring for dementia patients is not a walk in the park. It requires proper care housing — something that is currently critically undersupplied in the UK. By 2035, some 100,000 dementia sufferers will have no beds. 

Care and support are what they need from us.
Care and support are what the ageing — and those suffering from dementia — need from us.

Maureen:  a strong woman to a man named Michael. They have been married for 56 years and blessed with two daughters, three grandchildren and six great-grandchildren. Life was beautiful until, one day in 2011, Michael was diagnosed with mixed dementia. Mixed dementia is a condition where changes representing more than one type of dementia occur simultaneously in the brain.

Things go upside down for Maureen. Michael no longer recognises Maureen,  the one that he used to embrace. He began to think that he was cheating on his own wife whenever he and Maureen were together.

However, Maureen patiently took care of him, until she decided to send him to a care home in 2016 so that Michael will get proper treatment.

“Caring for someone with dementia is like living on a knife’s edge; it is so unpredictable and certainly has its challenges. You go through so many mixed emotions: pity, anger, frustration and even despair,” said Maureen.

In Sheila’s case, things went from bad to worse. She remained in denial when her husband, John, was diagnosed with dementia until one night when he tried to push her down the stairs. Luckily, Sheila managed to escape.

Sheila drove around the village, her eyes blinded by tears. She could not accept that her husband had attacked her.

“When I returned, John began pelting me with fruit. I tried to ring Social Services but all I got was an answerphone. So, in desperation, I called the police. By the time they finally arrived, John was calm and smiling as though nothing had happened,” said Sheila, who, for the sake of her safety, had to send John to a care home for better supervision.

These are true accounts of what has happened among dementia patients and their loved ones.

Dementia haunts England

Dementia is a neurological disorder that affects the human brain. Dementia, depending on its type, can affect people in many ways, changing everyday life physically, emotionally and psychologically

Dementia is now a common disease in the UK — in fact, it is now the biggest cause of death in England and Wales, surpassing heart disease. Research shows that from 2011 to 2016, there has been a 56% rise in the number of people diagnosed with dementia in the UK.

The figures illustrated the number of dementia patients in the UK, from 2011 until 2016. Info source:Alzheimer’s Research UK.
The above figures illustrate the number of dementia patients in the UK, from 2011 until 2016. Info source: Alzheimer’s Research UK.

According to Alzheimer’s Research UK, there are now 532,162 dementia patients in the UK. England alone has the highest number of patients, constituting approximately 84% (451,561)of UK’s total number of dementia sufferers.

This number will increase in the future as the UK’s ageing population continues expanding every year.

Undersupply:  thousands of dementia patients will end their lives ‘alone’

Let’s not forget to fight for those who can’t remember.
The number of dementia patients among the elderly will continue to increase as the UK’s ageing population continues expanding every year.

Dementia has become a real issue  in the UK, both in the urban or rural areas.

Meanwhile, the whole country faces a chronic undersupply of care home even as demand escalates.

The Alzheimer’s Society predicts that the gulf between demand and supply for care home beds in England alone will reach 30,000 by 2022. This number is estimated to increase  to 100,000 by 2035.

It means that thousands of vulnerable elderly people with dementia will end their lives ‘deserted and alone’ if this problem  remains unsolved, warned Alzheimer’s Society  chief, Jeremy Hughes, adding that it may become a ‘norm’ for care homes to cherry-pick the residents and fend off those with severe dementia.

To make matters worse, the British government has, without reason, decided to reschedule the publication of a long-awaited Green Paper that sets out plans for how to improve  care, support and funding for the elderly.

The publication of the Green Paper, originally earmarked for summer 2017, has been postponed several times. It has now been  further delayed to the autumn of 2018.

Jeremy Hunt, the then Secretary of State for Health and Social Care, said, “Whilst the long-term funding profile of the social care system will not be settled until the spending review, we will publish the social care Green Paper ahead of that.

“However, because we want to integrate plans for social care with the new NHS plan, it does not make sense to publish it before the NHS plan has even been drafted. So we now intend to publish the social care Green Paper in the autumn around the same time as the NHS plan.”

In June 2018, Theresa May, the Prime Minister announced additional annual increases in funding for the NHS of 3.4% per annum, amounting to an extra £20.5 billion a year by the 2023/24 financial year. This will include the expenses for dementia patients.

The government also noted that a number of proposals will be set up to ensure the dementia people will live healthier, longer and more independent lives, instead of isolated and lonely.

Unfortunately, if things remain the way they are, with the supply of adequate housing remaining in the negative, and the  continual postponement of the Green Paper, thousands of vulnerable older people with dementia will end their lives ‘isolated and alone’.

Thus, it is left to the private sector to help develop more care homes to address the serious undersupply in the UK. Here,  care homes investors have an investment opportunity which gives them a chance to not only profit their pockets, but at the same time, do something good for the society, especially for the elderly, so that they have dignity in the last few years of their lives.


Images sources:

UK’s Ageing Population Offers Lucrative Investment Opportunity

United Kingdom, like the rest of the world, is ageing. Britain’s ageing population has brought to the surface, issues surrounding proper care housing. Found below is a compilation of statistics regarding England’s elderly population to illustrate  how the UK care homes market has claimed the title  of ‘stand out asset class’ for investment and how this claim is likely to be retained.

What entails England’s stately developed country is an equally impressive population growth. Predictions made from the Office of National Statistics (ONS) presents the specifics of England’s future population:

According to latest figures by ONS, the UK’s population in 2016 was at its largest ever at 65.6 million, and is projected to reach over 74 million by 2039, ascribable to higher birth rates and immigration rates.

This projection by the ONS which shows the distribution of the UK population from 1976 – 2046 depicts an ageing society in the UK that is growing where other age groups are reducing.
This projection by the ONS, which shows the distribution of the UK population from 1976 – 2046, depicts an ageing society in the UK that is growing where other age groups are reducing. Source: ONS

An Age-diverse England

A growing elderly population is inevitable in the face of an expanding population, paired with increased life expectancy in the UK. In 2016, the old age dependency ratio (OADR) revealed that for every 285 people aged 65 and over, were 1,000 people aged 16 to 64 years (i.e. the traditional working age). The number of those aged 65 and over is expected to rise, with 157 local authorities looking at an OADR of about 500:1000 by 2036 compared to only 11 local authorities in 2016.

Even more bewildering is the fact that West Somerset is projected to have an OADR of 928 by 2036 — there will pretty much be the same number of those aged 16 to 64 years as those aged 65 and over!

Furthermore, over the next 25 years or so, one in 12 people will be aged 80 or above, with centenarians being the fastest-growing age group!

Source: http://lifeofayouthpastor.com/the-big-100/
The number of centenarians in the UK is growing! Image source: http://lifeofayouthpastor.com/the-big-100/

The predictions made above show UK’s population pyramid evolving into more of a rectangle — ONS predicts that the number of those aged 65 and over will grow to nearly a quarter of the population by 2046!

Such figures perforces more attention to be directed towards older citizens whose well-being requires special care. In most cases, this special care is presumed to be provided by adequately established care homes.

However, this has not been the case in the UK.

The UK Care Home Crisis

Like any other country, the UK, too, depends greatly on well-run care homes to provide special care for its burgeoning number of seniors. However, a closer look at care homes in the UK shows a critical undersupply for corporations to act on.

Knight Frank’s UK Healthcare Development Opportunities 2017 report identified a decrease in the number of registrations of both new care homes and new beds. Combined with the long-term trend of increased deregistrations, this has caused a nett loss of 166 homes and 2,612 beds across the UK market as of September, 2016.

Research by charity outfit, Independent Age revealed that overall, a quarter of homes were rated as either inadequate or requiring improvement in January this year with the worst region being the Northwest (this includes Stockport, Salford and Manchester). Which is why there is an increasing need for properly built, fully-functional care homes that cater to the varied needs of the aged and infirm.

Research by charity outfit, Independent Age revealed that overall, a quarter of homes were rated as either inadequate or requiring improvement in January this year with the worst region being the Northwest (this includes Stockport, Salford and Manchester).
Research by charity outfit, Independent Age revealed that overall, a quarter of homes were rated as either inadequate or requiring improvement in January this year with the worst region being the Northwest (this includes Stockport, Salford and Manchester).

A Quick Look At Those Affected By The Shortage

Image on the ageing statistics in the UK taken from csiprop.com website. 
Image on the ageing statistics in the UK taken from csiprop.com website.

 

Dementia, replacing heart disease, has become the leading cause of death in England and Wales. There are currently 850,000 people with dementia in the UK, with numbers set to rise to over 1 million by 2025, soaring to 2 million by 2051.

The sizeable amount of dementia-afflicted citizens (850,000) compared to only 416,000 people of varying illnesses who do live in care homes in the UK, illustrates the worrying issue at hand.

To put into staggering percentages, 96% of the population aged 65 years and over and 84% of those aged 85 and above are completely unattached to care homes (Laing and Buisson Survey 2016).

Dealing with the Crisis: Good news for England’s Older Citizens & Property Investors

Source: http://www.vulture.com/2016/05/grace-and-frankie-recap-season-2-episode-5.html
Source: http://www.vulture.com/2016/05/grace-and-frankie-recap-season-2-episode-5.html

Julian Evans, Knight Frank’s Head of Healthcare said, “The disparity of care bed supply and demand presents increasing opportunities for investors, and, combined with the fall in the sterling, has generated a truly global appetite for the sector. This sector is likely to be the stand out asset class of 2017, particularly for those investors wishing to diversify their asset portfolios in the current uncertain economic climate.”

The care home sector has high prospects for continued success going into 2018 — in January 2018, carehome.co.uk had its highest ever traffic to the site with 1,579,285 visits. This was up from 1,144,572 in December 2017, with an increase of 38%!

Moreover, recent news highlights that demand for care home places will soar by more than three quarters in less than 20 years!

CSI Prop director Virata Thaivasigamony on the company’s website, compares the incredible growth potential of care home sectors with one of UK’s top investment asset class: purpose-built student accommodation.,

“The undersupply of care homes has created opportunities for investors. With the UK’s ageing population, care homes investment could be the next student property investment.”

Also highlighted by the director is the average cost of £574 per week at a care home facility in comparison to Britain’s residential property rent that averages at £212 per week — this inevitably constitutes very impressive returns!

It is evident that the care home sector, subject to the same law of economics that observes every other form of investment, is very likely to be on the side of the investor — demand for more care homes and care beds is peaking and undersupply continues to be an issue.

With all said and proven, the prudent investor would find it in their best interest to consider the UK care home sector. After all, returns, in this case, seem to be almost absolutely guaranteed.

The Hitchhiker’s Guide To Property Investment

The world of investment, much like a candy stall, has a wide variety of selections. From unit trust to the stock market, to land, and all the way to agarwood, it seems like you can invest in pretty much everything. Whether you consider yourself illiterate in anything related to investment or believe yourself to be quite the opposite, stability and low risk are the words you most likely inherently trust, which is the case in property investment- places with high population growth and is strategic in its location are most likely to bring the best returns.

Where the stock market can become as unpredictable as radioactive substances, property investment is as steady as investment can get. Where unit trust is a form of investment that is not tangible and agarwood investment is not exactly subject to the most positive conditions, property investment gives you satisfying returns.

With a burgeoning human population comes the burgeoning need for sustenance and industry. This, in turn, pushes the need for jobs, schools and tertiary education institutions which are all inevitably related to an increase in the demand of housing spaces. With that in mind, the decision to purchase property to put up for rent can be a sure-fire way of receiving satisfying income.

Property investment stands on a pretty steady pedestal, allowing for a smooth transition towards the next step: where and what to invest in. Buying locally for investment is not quite an option – at least not in Malaysia, Hong Kong and Singapore – what with the respective federal government’s strict housing regulations, and property prices skyrocketing at an absurd pace and altitude. The right step to take would be to invest in overseas property. Locations where jobs, industries and higher learning institutions flourish as well as where the local authoritative figures make an effort to better the vicinity are ideal when it comes to pinpointing exactly where to invest your money.

Listed below are some pointers that will keep you on the right track: 

1. Follow The Money

An important point invariably deserves a repeat: where jobs, industries, higher learning institutions, and active locality improvement blooms is where you would like to invest in some rooms.

2. Leave the past in the past

It is common to doubt the success of new or previously criticized areas. This does not, however, make such places immune to improvement. There are many examples around us already — Pasir Ris and Jurong in Singapore, as well as Sentul and Brickfields in Kuala Lumpur. The most noteworthy example of a successful revamp is the one that happened to Bangsar. Believe it or not, Bangsar used to be rat-infested, water-logged and prone to floods. It is now one of the most expensive places in KL.

It would be a good idea to look at the progress of your location of interest. Specifically, on the expansion of the area, the improvement occurring or are set to occur and the developers that are zooming in on the place.

3. Buy the type of property that is most “lettable”

In certain places, two-bedroom houses and flats appeal to the widest range of potential tenants. Large family homes are not recommended.

4. Don’t be restricted to your own immediate area / expensive areas only

Expensive areas do not necessarily garner good rental prices. Property located further away may cost less but may still fetch good rental yields.

5. Ensure the locale is a thriving one for tenants

Places that boast convenience such as having supermarkets, universities and amenities nearby will be the highest in demand.

6. A letting agency is a good thing

Read up on your property of interest for additional security then allow your property to be taken care of by a letting agency.

7. Check out the developer

Like all that is new, newer developers are subject to more doubt than its well-documented seniors; many would argue the latter is a wiser choice. However, joint venture partners, financials and choices of location are definitely worth paying attention to when it comes to understanding what your new developer has to offer.