Care home occupancy continued its recovery from pandemic levels in 2022, according to the latest research by Knight Frank.

The latest edition of the UK Healthcare Property Market Overview shows occupancy levels rose to 84.3% in comparison with 79.4% in 2021.

All care fees rose by 3.3% in the year with private home fees up by 8.5%.

EBITDARM as a percentage of income grew marginally from 26.2% to 26.3%.

Approximately 10,000 new beds were granted via planning applications in the context of the 480,000 existing bed supply.

Average hourly pay for nurses increased by 4.1% to £18.10 and by 5.2% (£9.71) for carers. Despite significant increases, these rates still lagged behind the 6.6% increase in the National Living Wage (currently at £9.50 per hour) that is due to rise further to £10.42 by April 2023. Agency use across staff costs rose to 9.6%.

Julian Evans, head of healthcare at Knight Frank, said: “Whilst 2022 presented a number of standout factors which have continued to shape the sector, it is even more important to consider how the year ahead will play out with matters such as inflation and cost of debt playing a key part in the sectors future. Despite the clear headwinds, the underlying drivers for healthcare will support demand and performance and as in previous times of uncertainty, the sectors resilience will become increasingly apparent in the coming year.

“Whilst the nature of healthcare as a sector well supports the social impact side of ESG, sustainability and the increasing building standards will continue to be a growing consideration for investors and operators. The upgrading, refurbishment or repurposing of standing assets, for example, the older, smaller and less fit-for-purpose buildings may present as a viable value add strategy for operators and investors across the sector.”