Buying a Care Home: Factors to Consider

Are you thinking of buying a care home? The care home industry is highly regulated so check out our guide to read about the essential factors you should consider.

In the next 25 years, the number of people aged over 85 is expected to increase twofold, placing even more demand on care home places. This offers the opportunity for solid returns on investment, with a number of entrepreneurs joining the market for the first time. 

However, although there is certain potential, it’s not as easy as it may initially seem. Care homes are part of a heavily regulated industry and those planning on investing will need to make sure they balance up the requirements against the potential profit.

Not Everyone Can Own a Care Home

In order to maintain standards and ensure adequate knowledge, there are strict rules around who is allowed to own a care home. You will need to be registered with CQC, which isn’t just a tick-box exercise.

To be accepted you will need to demonstrate that you are committed to caring for the elderly and that you have the necessary experience and knowledge to be able to do so. This includes having the business experience to manage staff and deal with all aspects of the finance and administration.

Required Personnel

Providing you pass the requirements of the CQC, you will need to be one of the three types of legal entity permitted as an owner: an organisation, a partnership or an individual. You will need to be very clear which type of application you are making. If you are either an organisation or a partnership you will need to have a nominated individual as  the care provider.

As well as having a named care provider, every care home must have a dedicated manager. This individual must possess certain skills and knowledge to be permitted to hold the position. This includes a minimum of NVQ Level 4 in Care and Management and two years experience in a senior care management role.

In addition to the management, at least half of the staff must be qualified up to NVQ Level 2.

Finding the right quality of staff can be challenging, and retaining them can be even harder. Typically there is a lot of movement within the industry so keeping your staffing at required levels is much harder than you might think.

Find the Right Property

Along with regulations on ownership and staffing of a care home, you’ll need to find the right property

Not all premises are suitable for use as a care home as there are minimum requirements relating to floor space, communal areas, ceiling heights, ensuite facilities, catering and laundering, plus there are health and safety considerations too.

If you are planning on purchasing an existing care home, you will need to carry out due diligence to make sure the physical premises meet all necessary standards.

Buying a new property for conversion is even more challenging, and you’ll have the added criteria of making sure it’s in an area which offers easy access to town and local facilities. Without this you may have difficulty attracting residents.

Don’t forget to check the small print; freehold properties are strongly advised, rather than leasehold, wherever possible.

Get Expert Advice

Buying a care home requires careful consideration and expert knowledge of the regulations that apply. Getting advice from a specialist care home solicitor early in the process will ensure you don’t waste your time on an unsuitable purchase.

This note comprises the view of the author at the time written. This note is not a substitute for legal advice. Information may be incorrect or out of date and may not constitute a definitive or complete statement of the law or the legal market in any area. This note is not intended to constitute advice in any specific situation. You should take legal advice in specific situations. All implied warranties and conditions are excluded, to the maximum extent permitted by law.