Care Home Asset Management: Managing UK Care Home Property Assets Effectively

A practical guide for care home owners, operators, landlords and investors managing care home property assets across London and the UK

Care home asset management involves looking beyond day-to-day repairs and considering the long-term condition, suitability, performance and value of a care home property.

A care home is a specialist property asset. Its bedrooms, communal areas, bathrooms, kitchens, accessibility features, heating systems, fire safety infrastructure and other facilities all need to support the intended care model.

For owners and investors, effective asset management can involve planned maintenance, capital expenditure, refurbishment, lease management, regulatory considerations, investment analysis and decisions about the property's future use.

CQC Regulation 15 requires premises and equipment used by regulated providers to be clean, secure, suitable for their purpose, properly used and properly maintained. It also requires suitable arrangements for maintenance, renewal and replacement.

What is care home asset management?

Care home asset management is the strategic management of a care home property throughout its ownership or occupation.

It can apply to:

• Residential care homes

• Nursing homes

• Dementia care homes

• Elderly care homes

• Specialist disability care homes

• Learning disability care homes

• Physical disability care properties

• Mental health care properties

• Former care homes

• Purpose-built care facilities

• Specialist healthcare buildings

Asset management can cover:

• Building condition

• Planned maintenance

• Repairs

• Refurbishment

• Capital expenditure

• Lease management

• Accessibility

• Compliance

• Energy efficiency

• Operator requirements

• Investment performance

• Acquisition

• Disposal

• Redevelopment

• Alternative use

The objective is to understand how the property can continue to perform effectively while managing its physical and financial requirements.

Start with a detailed care home asset assessment

The first stage should be a clear assessment of the property's current condition and suitability.

A care home asset review can examine:

• Building age

• Construction type

• Floor area

• Number of bedrooms

• En-suite provision

• Communal areas

• Dining facilities

• Kitchen facilities

• Treatment or therapy areas

• Accessibility

• Parking

• Gardens

• Heating

• Plumbing

• Electrical systems

• Fire safety systems

• Lifts

• External areas

The assessment should identify both immediate defects and longer-term capital requirements.

This helps an owner distinguish routine maintenance from major projects that could affect the property's future performance.

Assess whether the care home remains suitable for its purpose

Care requirements and resident expectations can change over time.

An older care home may have limitations relating to bedroom sizes, en-suite facilities, accessibility, communal space or circulation compared with newer facilities.

CQC Regulation 15 guidance states that premises must be suitable for the service being provided, including appropriate layout, sufficient space, bathrooms and other support facilities. It also states that people's needs should be considered when premises are designed, maintained, renovated or adapted.

A care home asset review should therefore consider:

• Are bedrooms appropriately configured?

• Are bathrooms suitable and accessible?

• Is there enough communal space?

• Can residents move around the building safely?

• Does the layout support the current care model?

• Are specialist facilities adequate?

• Does the property support staff efficiently?

• Could refurbishment improve the building?

• Is the property becoming functionally outdated?

Build a planned maintenance strategy

Care home asset management should not rely entirely on reactive repairs.

A planned maintenance programme can identify potential problems before they become major failures.

Depending on the building, planned maintenance may include:

• Roof inspections

• Gutter cleaning

• Boiler servicing

• Heating system checks

• Plumbing

• Drainage

• Electrical inspections

• Fire alarm servicing

• Emergency lighting

• Lift maintenance

• Windows and doors

• Flooring

• Bathrooms

• Kitchen infrastructure

• Accessibility equipment

• External areas

CQC states that providers should have suitable arrangements for the purchase, service, maintenance, renewal and replacement of premises and equipment, together with maintenance budgets for buildings and relevant mechanical, engineering and electrical systems.

A property owner should therefore understand which maintenance responsibilities sit with the operator and which remain with the landlord.

Plan capital expenditure before major systems fail

Care homes can contain expensive building systems and specialist infrastructure.

Potential capital projects include:

• Roof replacement

• Boiler replacement

• Heating upgrades

• Electrical upgrades

• Lift replacement

• Bathroom refurbishment

• Kitchen replacement

• Window replacement

• Fire system upgrades

• Accessibility improvements

• External refurbishment

• Drainage works

• Energy-efficiency improvements

Rather than waiting for systems to fail, an asset management strategy can identify likely replacement dates and establish indicative budgets.

This can help owners plan expenditure and reduce the risk of unexpected major costs.

Review the care home lease and operator agreement

Where a care home is occupied by an operator under a lease, the occupational arrangement is an important part of asset management.

The owner should review:

• Lease length

• Rent

• Rent review provisions

• Break clauses

• Repairing obligations

• Insurance responsibilities

• Service charges

• Alteration provisions

• Assignment

• Subletting

• Dilapidations

• Landlord works

• Tenant works

• Refurbishment responsibilities

The physical property and care business may have different responsibilities, so these should be clearly established.

A landlord may own the building while the care operator manages residents and day-to-day care delivery.

Monitor the relationship between property and care operations

Care home property and care operations are closely connected.

Building problems can affect:

• Resident experience

• Staff operations

• Room availability

• Maintenance costs

• Accessibility

• Service delivery

• Operator expenditure

Regular communication with the care operator can therefore provide useful information for the asset management strategy.

Operators may identify:

• Recurring repairs

• Outdated facilities

• Accessibility problems

• Bedroom limitations

• Communal space requirements

• Equipment issues

• Future refurbishment needs

• Opportunities to reconfigure the building

This information can help an owner decide where investment should be directed.

Manage regulatory property requirements

For regulated care services, property condition forms part of the wider regulatory environment.

CQC Regulation 15 requires relevant premises and equipment to be clean, secure, suitable, properly used and properly maintained. It also requires regular health and safety risk assessments and suitable arrangements for maintenance and replacement.

CQC's regulations apply to registered providers and managers carrying on regulated activities, with the relevance of individual regulations depending on the type of service being provided.

Asset managers should therefore understand the specific care service operating from the property rather than applying a generic compliance checklist.

The care operator remains responsible for applicable regulatory obligations even where maintenance responsibilities are delegated to contractors.

Manage accessibility as part of the asset strategy

Accessibility should form part of long-term care home asset management.

A property may require:

• Level-access entrances

• Ramps

• Accessible bathrooms

• Wider doorways

• Grab rails

• Passenger lifts

• Platform lifts

• Accessible bedrooms

• Specialist flooring

• Accessible parking

• Improved circulation space

CQC guidance states that people's needs should be considered when premises are designed, maintained, renovated or adapted and that reasonable adjustments should be made for people with disabilities where required.

For owners, accessibility improvements should therefore be considered when planning major refurbishment rather than only when a problem occurs.

Refurbishing a care home property

Refurbishment can be an important part of maintaining the usefulness and competitiveness of a care home asset.

Potential works include:

• Bedroom refurbishment

• En-suite bathroom upgrades

• Communal area improvements

• Kitchen refurbishment

• Flooring replacement

• Decoration

• Heating upgrades

• Electrical works

• Fire safety improvements

• Accessibility upgrades

• Window replacement

• Roof repairs

• Garden improvements

• External refurbishment

The specification should reflect the intended resident profile and care model.

A dementia care home may require different environmental considerations from a general residential care home, while a specialist disability facility may require more extensive accessibility adaptations.

Before major works begin, owners should establish whether landlord consent, planning permission, building control approval or other professional advice is required.

Consider energy efficiency and building performance

Energy costs can be significant for larger residential care buildings.

An asset management review can consider:

• Heating efficiency

• Insulation

• Windows

• Lighting

• Hot water systems

• Building controls

• Energy monitoring

• Ventilation

• Renewable technologies

Energy improvements should be assessed against the building's age, condition, lease arrangements, expected holding period and the likely cost savings.

Improving building efficiency can also form part of a wider refurbishment strategy.

Review the care home's investment position

For investors and landlords, asset management should include regular review of the property's investment characteristics.

Relevant factors can include:

• Rental income

• Lease length

• Rent reviews

• Operator covenant

• Building condition

• Capital expenditure

• Location

• Accessibility

• Planning position

• Market demand

• Alternative use

• Exit options

Care homes are specialist properties. RICS identifies care homes among specialist properties where valuation can involve the profits method and consideration of business profitability and trading potential.

This means the property's physical characteristics and its relationship with the operating business can both be relevant when assessing the asset.

Consider refurbishment, expansion or redevelopment

A care home asset management strategy should consider the property's longer-term options.

Potential strategies include:

• Refurbishing the existing care home

• Reconfiguring bedrooms

• Improving communal areas

• Extending the building

• Adding accessible facilities

• Changing the care model

• Leasing to another operator

• Selling the property

• Redeveloping the site

• Considering an alternative planning use

Any extension, change of use or redevelopment should be assessed against the relevant planning requirements and professional advice.

The important point is to assess these possibilities before committing substantial capital to a particular strategy.

Manage vacant care home property carefully

A vacant care home still requires active asset management.

Potential risks include:

• Water leaks

• Damp

• Heating failure

• Vandalism

• Security problems

• Pest activity

• Deterioration

• Drainage problems

• Unauthorised access

Regular inspections can help identify problems early.

A vacant period can also provide an opportunity to complete:

• Building surveys

• Refurbishment

• Accessibility improvements

• Roof repairs

• Heating upgrades

• Electrical works

• Fire safety works

• Reconfiguration

This can prepare the property for a new operator or future use.

Care home asset management in London

London care home properties can range from purpose-built facilities to converted houses and former healthcare buildings.

Asset managers may need to consider:

• Property age

• Planning restrictions

• Accessibility

• Transport links

• Parking

• Local demand

• Building condition

• Lease structure

• Development potential

• Contractor availability

• Refurbishment costs

Older London properties can require particular attention to damp, drainage, roofs, heating, electrical installations, accessibility and structural alterations.

The value of the underlying site may also make development potential relevant when deciding whether to refurbish or redevelop.

Manage a care home property portfolio

For larger investors and care operators, asset management can extend across a portfolio of care homes.

A portfolio review can identify:

• Properties requiring major investment

• Buildings with upcoming lease events

• Underused properties

• Vacant care homes

• Properties suitable for refurbishment

• Potential acquisition targets

• Potential disposals

• Development opportunities

• Assets with rising maintenance costs

This allows owners to plan capital expenditure across the portfolio rather than treating every property independently.

RICS identifies property management, investment analysis, strategy, lease restructuring, acquisitions, disposals and development consultancy among areas relevant to real estate practice.

Review the property before acquisition

Care home asset management can begin before the property is purchased.

Pre-acquisition due diligence should consider:

• Title

• Planning history

• Existing use

• Building condition

• Technical surveys

• Lease arrangements

• Operator position

• Accessibility

• Fire safety

• Mechanical and electrical systems

• Capital expenditure

• Refurbishment requirements

• Market evidence

• Alternative use

The asking price should therefore be assessed alongside the property's likely future maintenance and investment requirements.

A detailed property assessment can help identify major expenditure that may otherwise only become apparent after acquisition.

Working with Fraser Bond

Fraser Bond supports care home owners, operators, landlords, investors and developers with specialist UK property requirements.

Care home asset management support can include:

• Property inspections

• Asset reviews

• Maintenance planning

• Capital expenditure planning

• Refurbishment

• Building works

• Contractor coordination

• Property management

• Investment assessment

• Property sourcing

• Acquisition support