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  • Kirsty Kerr

Increasing costs of food, property, and staffing decrease average profit margins of care homes

Over the past ten years, the average profit margins of care homes in the UK has dropped as costs of food, property, and staffing have increased. As the senior living property market continues to grow, it could be beneficial to provide both low-acuity assisted living for patients who have fewer care needs and need less supervision and high-acuity care for patients who need more care and more supervision on the same site to try to cut some of these costs.

Recently, the largest cost challenge that care home operators have faced has been the cost of staffing. Staffing costs have increased 50% over the past ten years in unison with a rise in the National Living Wage, which is currently set at £8.21 per hour but will likely continue to rise following commitments by both main political parties. As it has become harder to find qualified staff who are willing to work in care homes at competitive rates, care home operators have begun to rely more heavily on agency staff. Often, this comes at a substantially greater cost to the care home and possibly creates issues around quality control. 

Due to these challenges, average profit margins for care homes has decreased by 5% over the past decade (Pamben, "Care Home Profitability Dented Due to Rising Costs"). It is vital for care homes such as Bromson Hill Nursing Home, based in Ashorne, Warwickshire, to find ways to continue to earn a profit so that they can continue to provide the best care to their residents as the demand for elderly care continues to grow.

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