Securing £4.35m Finance to Build a New Care Home From the Ground Up
Buying land for care home development is a big undertaking, learn more about finance a care home build.
With demand on the increase for quality care homes, a brand new development from a vacant plot of land could prove a highly profitable investment for any experienced developer.
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With over 11 million people in the UK over the age of 65, there’s a significant and growing need for more good quality care homes to house Britain’s ageing population. Some areas, such as Blackpool, Southend and Bournemouth, boast the country’s oldest populations, meaning these seaside towns and the surrounding areas have great need of care facilities.
In some cases, developers will purchase established care homes and transform them into high-quality establishments, taking on the burden of transforming CQC ratings and poor occupancy. In other scenarios, we see investors buy properties left vacant in the wake of the coronavirus pandemic, particularly hotels, with a plan to transform these spaces into care homes.
And finally, we’ve noticed a surge in developers buying up vacant plots of land building care homes from the ground up. Often, this is the activity of an experienced care group, but sometimes it is a first-time development for an investor who is new to the care space.
While there are significant benefits to acquiring an existing care home, including staff, CQC recognition and equipment, there are simply not enough care homes for the ageing population. So, investors who decide to build from scratch should be aware of the hoops they need to jump through before laying the first brick.
The CQC (Care Quality Commission) is the independent regulator for the health and social care industry in England. Every care home must receive a CQC rating, based on a traffic light system. In order to receive a positive rating, care homes must adhere to strict regulations set out by the CQC, such as hiring suitably qualified staff, meeting health and safety standards and having access to the necessary equipment to deliver proper care to all residents.
So, when you start from scratch with a care home, you need to consider the CQC’s standards, along with your general development plans and any planning restrictions from the outside. In the case of one Rangewell client, building a care home from the ground up proved successful in the long run but without the right finance, the project may not have succeeded.
Why was there a problem?
A client in Devon approached used to secure finance that will support the development of a brand new care home from the ground up. In this particular case, the client acquired 8.48 acres of land and required finance to develop a 60-bed luxury care home
When applying for finance for a care home development, the lender will not only assess the property or land purchased, its location and any business plan, they will also look at the client’s history, including their experience in the care industry and any other relevant business or financial information. In this situation, the client did already own a care home, however it was their first development from the ground up. As a result, the client required support to ensure the finance application fully highlighted their experience and business plan, while reassuring the lender of any concerns surrounding the brand new development.
So, the biggest problem faced by the client was gaining trust and confidence from the lenders and ensuring they are aware of the client’s experience and skills.
Why we were able to help
Thanks to our experience as care home finance brokers, we know what the lenders are looking for and where their biggest concerns lie, so we can support clients to make the best application and, therefore, secure funding that helps them to meet their goals.
We helped the client to put together an application that highlighted their experience in the care industry, including key figures from the existing facility. In the end, the client secured £4.35m to develop their 60-bed care home in Devon over a period of 18 months, allowing them time to establish the facility in the local area and build residential capacity once complete.
About care home finance
Depending on the development in question, care home finance covers a wide range of finance products and, therefore, you need an expert on your side to help you find the right solution for you.
With this client, we helped the client to find finance to develop a care home from a plot of land - so that they could transform the vacant plot of land into a profitable care home that provided necessary care to the local community.
When you come to Rangewell, our team of dedicated professional advisors will work with you to determine your plan for the development and how much finance you could possibly secure to turn your dreams into reality. You may be able to purchase the land outright, but require finance for the construction of the care home, or you might need finance to help secure the land in the first place, particularly if it is located in a highly sought-after area.
Our experts understand the care home finance landscape and know what lenders will ask, as well as what answers they are looking for. From finding finance based on GDV (Gross Development Value) through to securing longer repayment terms to allow for a grace period in the development and ultimate opening of the facility, we’re here by your side every step of the way.
Care development home finance with Rangewell
So, whether you are looking to build a care home from scratch like the example above, or you are redeveloping an established facility, come to Rangewell to ensure you have the best possible finance to render your ideas real.
With many specialist lenders in our books, we tap into the whole of market and find the very best finance product for your specific circumstances. We’ll take into account your budget, experience and timeline, and help you to assemble a fully comprehensive application to the lender, so they can see what we see.
Get in touch with Rangewell today and start learning about your finance options, so you can make the right decisions before the project kicks off. Look no further for care home finance. Make Rangewell your first choice.