How to Source Care Home Properties - Finding the Right Property for a Care Business

How to source care home properties in the UK - where operators can look, what makes a property suitable, and how to assess planning, location, condition, refurbishment and commercial lease requirements.

Sourcing the right property is one of the most important stages when establishing, expanding or relocating a care home. A property may look suitable as a large residential building, but its layout, planning position, location, accessibility, condition and ability to meet care requirements all need to be considered before an operator commits to a purchase or lease.

For care operators looking for premises, the objective should therefore be to find a property that works commercially as well as operationally.

Fraser Bond helps care operators, property owners and investors assess specialist property opportunities, coordinate refurbishment and building works, and structure property arrangements around the intended use.

What Does Sourcing a Care Home Property Involve?

Sourcing a care home property means identifying buildings that could accommodate a residential care operation and then assessing whether they are suitable for the intended service.

Potential properties can include:

• Existing care homes

• Former care homes

• Nursing homes

• Large residential houses

• Former residential institutions

• Guest houses and hotels

• Specialist healthcare properties

• Former children's or residential care premises

• Commercial buildings with potential for conversion

• Development opportunities

However, not every large property can be converted into a successful care home.

The intended resident group, number of beds, staffing model, care requirements and regulatory obligations should all influence the property search.

Start With a Clear Property Brief

Before approaching agents or property owners, a care operator should establish exactly what is required.

A property brief can include:

• Preferred location

• Minimum and maximum number of bedrooms

• Number of proposed residents

• Number of bathrooms

• Minimum floor area

• Ground-floor accommodation

• Communal areas

• Garden or outdoor space

• Parking

• Accessibility requirements

• Staff facilities

• Storage

• Budget

• Purchase or lease preference

• Planning requirements

• Refurbishment budget

The more specific the brief, the easier it is to eliminate unsuitable properties.

For example, an operator looking for a 20-bed elderly care home has very different requirements from an operator planning a smaller specialist residential service.

Where Can You Source Care Home Properties?

There are several routes available to operators.

Specialist Property Agents

Specialist commercial property agents can be useful because they may have access to healthcare, social care and operational property opportunities that do not appear on mainstream residential property websites.

An operator should give the agent a detailed brief rather than simply asking for "a care home".

Existing Care Home Owners

Approaching existing care home owners can uncover properties that are being considered for sale or lease before they are widely marketed.

A care home owner may be looking to retire, relocate, restructure a business or sell an underperforming property.

This can create opportunities for operators who are prepared to carry out appropriate due diligence.

Former Care Homes

Former care homes can be particularly interesting because the building may already have features associated with residential care.

However, previous use does not automatically mean that the current planning, building or regulatory position remains suitable for a new operator.

The property's current permissions and condition should be independently verified.

Commercial Property Agents

Mainstream commercial agents can also have suitable properties, particularly former hotels, guest houses, institutional buildings and larger residential properties.

The operator should explain the intended care use at an early stage so that properties can be assessed against the correct requirements.

Direct Landlord Approaches

Some property owners may be willing to lease a suitable building to a care operator even if the property has never previously been used as a care home.

A direct approach can be particularly useful when looking for larger houses, former institutional properties or buildings that require conversion.

Developers and Property Investors

Developers may have properties that could potentially be adapted for care use.

An operator can work with a developer from an early stage to influence the layout, accessibility, communal areas, bedrooms and other features required for the intended service.

Look at the Location, Not Just the Building

Location is critical when sourcing a care home.

CQC guidance on premises states that care premises should be suitable for their intended purpose and appropriately located, taking account of the needs of people using the service and access to relevant facilities and the local community.

Operators should therefore consider:

• Local healthcare services

• Hospitals

• GP services

• Pharmacies

• Public transport

• Shops

• Parks and outdoor areas

• Community facilities

• Family accessibility

• Staff commuting

• Parking

• Local traffic conditions

For a London care home, for example, a property in North London may have very different operational advantages from a similar building in West or South London.

The right location depends on the residents the operator intends to support.

Check the Planning Position Before Committing

Planning is one of the most important parts of sourcing a care home property.

A building that currently operates as a house, hotel or other property type may require planning consideration before it can be used as a care home.

Current CQC guidance for new care home providers requires evidence relating to planning permission. Where permission exists, the documentation should identify the premises and relevant use class and any conditions or restrictions. Where there is no planning permission document, CQC says confirmation may be required from the local authority that the change of use has been authorised or is not required.

Operators should therefore investigate:

• Existing planning use

• Planning history

• Previous applications

• Current conditions

• Proposed number of residents

• Proposed alterations

• Parking requirements

• Local planning restrictions

• Whether a change of use is required

Planning should be checked before spending significant money on a property.

Assess the Property Layout

A suitable care home needs more than enough bedrooms.

The internal layout should be considered against the proposed service.

Look at:

• Bedroom sizes

• Number and location of bathrooms

• Communal lounges

• Dining areas

• Kitchen facilities

• Staff areas

• Storage

• Laundry

• Medication storage

• Reception or administration areas

• Accessibility

• Fire escape arrangements

• Internal circulation

CQC guidance states that premises should be suitable for their intended purpose, appropriately sized and provide suitable facilities and amenities, including sufficient toilets and bathrooms where relevant.

A building with an attractive purchase price may become expensive if substantial structural changes are needed to make the layout workable.

Consider Accessibility

Accessibility should form part of the initial property assessment.

Depending on the intended residents, the building may need features such as:

• Step-free access

• Accessible bathrooms

• Wider doorways

• Suitable corridors

• Handrails

• Passenger lifts

• Level access to communal areas

• Appropriate bedroom layouts

Not every property will require the same adaptations.

The operator should assess the needs of the intended residents before deciding whether a building is suitable.

Inspect the Condition of the Building

A property inspection should cover more than cosmetic appearance.

Before proceeding, investigate:

• Roof

• Damp

• Structural condition

• Electrical systems

• Plumbing

• Heating

• Windows

• Drainage

• Fire safety

• Asbestos where relevant

• Security

• External areas

• Accessibility

• General maintenance

CQC Regulation 15 requires premises used by regulated services to be clean, secure, suitable for their purpose and properly maintained.

The operator should therefore understand the likely capital expenditure before agreeing the purchase price or lease terms.

Existing Care Homes Can Have Advantages

An existing or former care home can sometimes reduce the amount of work required compared with converting an ordinary residential property.

Potential advantages include:

• Existing bedrooms

• Existing communal spaces

• Established accessibility features

• Existing care-related infrastructure

• Previous specialist use

• Potentially more appropriate layout

However, operators should still carry out full due diligence.

The previous use of a property does not guarantee that its current planning permissions, building condition or regulatory arrangements will meet the requirements of a new operation.

Former Hotels and Large Houses

Former hotels and large houses can also be considered.

A former hotel may already have:

• Multiple bedrooms

• En-suite facilities

• Commercial kitchen space

• Reception areas

• Communal rooms

• Parking

• Larger circulation areas

A large residential property may offer:

• More domestic surroundings

• Gardens

• Flexible communal areas

• Potential for conversion

But conversion costs can be substantial.

The property should be assessed before assuming that its existing layout will work for the proposed care service.

Buying or Leasing a Care Home Property

Operators do not necessarily need to purchase the property.

Depending on the business model, a care operator may consider:

• Buying an existing care home

• Leasing a care home

• Leasing a former care home

• Taking a long-term lease on a suitable property

• Working with a property investor

• Entering into a development arrangement

A lease can reduce the initial capital required for acquiring the building, but the operator must carefully assess the rent, lease length, repair obligations, refurbishment responsibilities and break clauses.

The landlord's financial and legal position should also be considered.

Calculate the Full Property Cost

The advertised rent or purchase price is only one part of the calculation.

An operator should consider:

• Purchase price or rent

• Stamp Duty Land Tax where applicable

• Professional fees

• Planning costs

• Building control

• Surveys

• Legal costs

• Refurbishment

• Fire safety works

• Accessibility adaptations

• Furniture and equipment

• Ongoing repairs

• Insurance

• Utilities

• Maintenance

This is particularly important when sourcing properties that appear inexpensive but require extensive conversion.

Due Diligence Before Making an Offer

Once a potentially suitable property has been identified, the operator should carry out detailed due diligence.

This can include:

• Title review

• Planning search

• Building survey

• Fire safety assessment

• Asbestos assessment where appropriate

• Electrical inspection

• Mechanical and heating assessment

• Accessibility review

• Lease review

• Insurance requirements

• Local market assessment

• Refurbishment cost estimate

CQC registration requirements also make it important for care providers to have the appropriate premises and supporting documentation in place. CQC states that providers must be registered before carrying on regulated activities, and premises need to be ready and suitable for the proposed service.

How Fraser Bond Can Help Source Care Home Properties

Finding a suitable care home property is not simply about locating a large building.

The property needs to work for the intended residents, care model, planning position, operational requirements and financial structure.

Fraser Bond can help care operators and investors assess property opportunities, identify suitable buildings, liaise with property owners and agents, coordinate surveys and refurbishment, manage contractors and support the wider property process.

For landlords, Fraser Bond can also help assess whether a property could be suitable for specialist care use and identify potential operator requirements.

If you are looking to source a care home property in London or elsewhere in the UK, Fraser Bond can help you assess the property opportunity and develop a practical route towards acquisition, leasing or refurbishment.