Assisted living providers in the UK are increasingly filling a critical gap in the care system, driven by demographic shifts and evolving social norms. This sector’s growth is capturing the attention of high-net-worth investors for several reasons.

Assisted living providers usually offer an alternative to more traditional long-term care options like nursing homes – and from a resident’s perspective, there is more freedom, more individuality and more options – something that higher quality providers are keen to stress.

The UK market for homecare and supported living has been valued at £11.5 billion as of 2021/22, with approximately 670,000 people receiving these services, a significant component of the larger non-residential care market.

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These services are becoming more important as an intermediate step in the ‘ladder of care’, especially as budget pressures on councils’ social care budgets lead to a shift from care home care to community-based alternatives.

The UK stands out in Europe due to its large elderly population, combined with changing lifestyles and a steady increase in disposable income among seniors – making the UK senior living market particularly attractive for investment. The market faces pressure due to limited stock, but the growing demand is a strong indicator of its potential. Detailed insights into this market, including demand, supply, product size, leasehold prices, rent levels, service charges, operational models, and transactions, can provide a comprehensive picture for investors and other stakeholders.

This healthy growth is mirrored in the U.S. market – where the  market for assisted living facilities was valued at $91.8 billion in 2022.  Models show the sector is expected to continue growing at a compound annual growth rate of 5.53% from 2023 to 2030, reflecting the increasing demand for such services as the population ages. In the United States, there are about 30,600 assisted living communities, housing nearly 1.2 million beds, a number expected to grow alongside the aging population.

Assisted living communities are predominantly for-profit, with more than 80% operating under this model. Despite this, nonprofit communities have also been gaining market share. These nonprofit communities are often smaller but maintain higher occupancy rates, albeit with potentially fewer amenities compared to larger, national-brand competitors.

A key trend influencing the global retirement community industry, which includes the UK, is multigenerational living. This approach has economic and social advantages, particularly for retirees living on fixed incomes who may face increased care costs and other financial difficulties. Retirement communities in the UK are adapting to this trend, offering various housing options like apartments, townhouses, and single-family homes that facilitate multigenerational living.

The UK retirement communities market is influenced by several factors, including the growing number of retiring people, changing social norms with more adults preferring to stay alone, and the increasing obesity rate among older citizens.  However, challenges such as a shortage of skilled workforce, low savings of baby boomers, and the desire for communities that resemble home are also impacting the market.

While ‘care homes’ often have the perception of ‘pile em in’, charge a lot and care a little, assisted living is very different, with many ethical developers priding themselves on offering a superior experience for residents, adapting their provisions to suit residents needs – and when a provider gets it right, it’s a win/win for developers, investors and residents alike.  It’s very much focused on providing high quality living rather than just care.

Specialist real estate developer Urban Village Group is an above average example of a developer creating spaces where people want to live, through their unique people focused approach to design.

Their accommodation life cycle model is geared to meet residents’ needs, and the focus of construction is on providing local jobs and sourcing local materials where possible.

This means that local jobs are created from construction to completion – then local residents are supported to enjoy a high standard of living whilst getting the care they need, with care adapting as their needs change.  Additionally, the developer puts the use of sustainable energy and technology at the heart of their developments, meeting ESG concerns.

Frankly, what’s not to love?  It’s this type of provider that is particularly attractive to investors, because everyone wins.

Investors love the assisted living sector due to its growth potential, driven by demographic changes and the evolving needs of the elderly population while improving elderly care – and making a healthy return.  If it sounds positive, that’s because it is!

However, from a pure investment perspective perhaps the biggest attraction of investing in this market sector is the potential for future opportunities, which are not even fully explored yet.

In the near future, we can expect to see the use of big data and technology in retirement communities to track seniors’ health and provide appropriate care, with investment that the NHS is unlikely to be able to attract.  Areas like fall prediction and non-invasive health monitoring technology will ensure that residents can live independently and safely and in a like-minded community for longer.These future opportunities are another factor that makes this sector appealing for investment.

Additionally, strategies for growth in this market include concentrating on territories with large geriatric populations, competitive pricing, and maximizing reach through social media and high-performance websites.

In summary, the assisted living sector offers significant opportunities for high-net-worth investors, both in the UK and and the US in a sector driven by demographic trends, technological advancements, and evolving market dynamics.

The sector’s growth potential, coupled with its critical role in the broader healthcare and social care ecosystem, makes it a compelling and ethical area for investment.

To learn more about investment opportunities with Urban Village Group, visit here.

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