Commercial Property Profiles Nursing Homes Care Sector

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Commercial Property Profiles Nursing Homes Care Sector

The care home and nursing sector in the UK is becoming increasingly more interesting to investors and developers looking to buy commercial property. Recent research indicates that the business is moving away from large corporate ownership to an increasing percentage run by small companies and private individuals. Buying a nursing home or care home can be expensive however, and for most investors it is necessary to take out a commercial mortgage to secure the right premises to set up a business of this type.

A commercial mortgage from a high street bank or a commercial lender could provide up to 85 per cent of the purchase price depending on the lender and the value of the property. Most lenders will need a deposit of between 20 and 30 per cent, and proof that repayments can be met. For new businesses this will be in the form of expected income projections, whereas for existing businesses it will involved a full set of trading accounts covering two years.

There is certainly a viable demand for nursing homes and care homes, with longer life expectancy throughout the UK. Research has predicted that the number of individuals over 60 will increase by 37 per cent by 2031. Nursing and care home provision will need to expand to meet this demand. The regulatory system that governs the industry is very stringent, and minimum standards must be adhered to. For commercial lenders, this can be off-putting, particularly for those applicants without industry experience.

If you approach a commercial lender or high street bank they will want to know a variety of information, such as:

• Trading history of existing business or income projection
• Amount of deposit
• Location of premises
• Credit history
• Industry or management experience (If you are going to operate the business you need to prove you are fit and hold an S/NVQ at level 4 in either management or care)

If you are looking to borrow money for any type of property for any purpose, or for business or mortgage advice, please complete a Mortgage Enquiry Form below and we will arrange for one of our specialist mortgage advisers to contact you.

Alternatively, you can call us on 0845 108 0505.