Turn of the times, Care Homes back on track

The UK economy has finally turned out of the recession and looks to get back into the trend of growth.

This will come as good news for care home industry as demographics show life longevity and the increased break up of traditional family units. The care home industry, unlike the lending industry, is not driven by the economy it’s driven by demographics. While the economy has been officially in a recession it has pushed up the cost of lending on care homes and reduces the amount of money available to lend. The knock on effect is restricting care home expansion. Whilst the number of people in the UK who need long-term care, can only grow meaning this demand will have to be met sooner or later. By 2060 the number of people aged over 85 will have increased and these people will need long-term healthcare.

Legislation is also another factor that drives the market as when the introduction of national standards were introduced, a scope for newer builds had increased and this was further continued with the Care Standards Act 2000 which required care homes to be updated in terms of standards and looks therefore refinancing & purchases for care home owners or investors was at an increase in terms of the lending market.

However, in recent times the maximum Loan to Value dropped dramatically once the recession hit therefore making it hard to refinance or purchase without high initial deposits.

But, last month, Crystal Mortgages Ltd sourced a product to enable care home owners to borrow up to 100% of goodwill value of the care homes. David Parke, Operations Manager at Crystal Mortgages, says “Given how many major high street banks have been and still are reluctant to lend we’ve been in a wonderful position to assist where other financial institutions have hindered, using many years of experience of getting commercial loans approved.”
“This has ultimately resulted in greater application and completion figures throughout the business.”
“Over the next year we are confident that the new 100% Healthcare offering can aid applicants in bringing their ambitions to fruition.”


By Toby Breeden