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Care home occupancy: Light at the end of the tunnel?

With the older people care home sector feeling the impact of 2020, will 2021 be the year of recovery for these providers? Tom Hartley, Director at Carterwood, forecasts the impact of the second wave of COVID-19 and discusses recent research into care home occupancy levels.

The last nine months have been extremely challenging for the older people care home sector, to put it mildly. The COVID-19 pandemic has caused a loss of life on a tragic scale and pushed those who deliver care to the limit of their endurance.

I know from speaking to operators on an almost daily basis throughout this crisis just how difficult it has been to protect residents, reassure relatives, keep employees safe, and to safeguard the future of their businesses. The fortitude displayed in such trying conditions has been incredible to witness.

As we enter 2021, the recently approved Pfizer and AstraZeneca vaccines (along with a pipeline of others) bring hope that the new year will mark a turning point. If 2020 was about resilience, 2021 feels like it could be the year for recovery.

Our new analysis on the impact of COVID-19 on the older people care home sector in England supports this view. It simultaneously shines a light on the sobering human impact of the pandemic, while showing a path to occupancy recovery as soon as November 2021 – less than 12 months from now.

A difficult winter ahead

We believe that the profile of the second wave of care home deaths will be wider and flatter than the first wave. We do foresee an inevitable impact from the national rise in infection rates in the wider community over the last few months – and I know that infection rates and mortalities from COVID-19 in care homes are currently creeping up across the board – but the policies and procedures put in place by care providers throughout 2020 have been demonstrated to protect older care home residents effectively.

Carterwood market forecasts - Actual & forecasts care home deaths to April 2022

Actual/forecast elderly care home deaths per week, England


The typical seasonal trend of ‘excess winter deaths’ will serve to elongate the duration of this second wave, but thanks to the continued efforts of operators and their staff, we believe that it will be significantly less severe than the first wave.

Overall, we are forecasting a total of 27,982 excess deaths of older people in care homes during the course of the COVID-19 pandemic. The scale of this tragedy is almost impossible to comprehend and our thoughts are with everyone who has lost loved ones during the pandemic.

The return to pre-pandemic occupancy

We estimate current occupancy levels in England at between 80% to 82%, with a trend of slow recovery from a low point of 78.8% in June 2020.

The next few months will, in our view, remain challenging, with occupancy falling slightly away from current levels as care home deaths increase in line with the second wave.

Forecast elderly care home occupancy (2020-2024), England

Forecast elderly care home occupancy (2020-2024), England

However, a more sustained recovery will manifest itself during 2021, driven by pent-up demand and the slow but ultimately decisive impact of the vaccination programme that we now know should take place in quarter one. Overall, we’re pleased to say that we believe average occupancy across the sector in England could return to pre-pandemic levels of 87.3% as soon as November 2021. For the financial health of the sector, this recovery cannot come soon enough.

A stable and resilient picture

Despite a positive outlook for occupancy recovery, it is sadly inevitable that for some operators, the financial and staffing pressures, localised COVID-19 impact and asset obsolescence will take their toll and force closures. Overall, we expect a total loss of 35,700 existing elderly care home beds between November 2020 and December 2024.

We have assumed no change to new bed additions, as there is no evidence to the contrary, and our model assumes a net bed loss across the market equivalent to pre-COVID-19 levels of around 3,000 beds per annum from mid-2022 onwards.

5-year bed requirement forecast (2019-2024)

5-year bed requirement forecast (2019-2024)

Taking all the above into account, the next five years paints a stable and resilient picture for older people care home demand. The long-term demographic profile remains compelling and the sector has been remarkably resilient in the face of material levels of bed loss over the past few decades. We estimate a shortfall of between circa 57,300 and 64,300 market standard beds by December 2024, and between 221,600 and 228,600 wet-room beds.

A brighter picture

Having worked in the social care sector for over ten years now, my characterisation of those who run care homes is one of grit, determination and, above all else, a refusal to accept failure. This indefatigable spirit has been central to minimising the inevitably severe impact of a pandemic that has turned the world on its head, and I am in awe of the efforts of operators and their teams.

That’s why I’m pleased to be able to say that we believe there is light at the end of the tunnel. The short-term picture remains challenging; but a return to pre-pandemic occupancy levels is in sight, and the investment case for the sector as a whole remains compelling in the longer term.


Tom Hartley is Director at Carterwood. Email: Twitter: @CarterwoodLtd






About Tom Hartley

Tom Hartley, Director, Carterwood

Tom joined Carterwood in 2010 and is a qualified chartered surveyor. He is part of Carterwood’s senior leadership team.

Over the last decade, Tom has worked with many of Carterwood’s clients to assist with commercial due diligence, obtaining planning permission, improving the performance of existing services and setting future strategy for groups and portfolios. He is also the commercial lead for the business’ digital platform for analysing elderly care home markets – Carterwood Analytics.

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