Global property advisor Knight Frank has reported the supply of care home beds fell for the first time by 177 in 2022, with an expected shortfall of more than 200,000 beds by 2050.

Knight Frank’s ‘Healthcare Development Opportunities’ report showed a 15% drop in the number of homes completed in 2022 with 10,000 new beds granted via planning application.

The property expert reported a “promising start” to 2023, however, partly due to completion of delayed 2022 projects.

Julian Evans, head of healthcare at Knight Frank, said: “The UK elderly care market is at risk of reaching capacity by the end of the decade, and this is a worrying projection. Not only must we build more care homes, but we must take action to support standing stock to reduce the level of home closures, which continues to work against the delivery of new homes as we attempt to grow the supply level.”

The analysis come after HC-One and Methodist Homes announced this month they were reducing capacity with plans to offload 19 and 10 homes, respectively.

The report highlighted an opportunity for investors to upgrade current care home market supply with 81% of homes older than 20 years.

It said ESG and net zero pressures would play a role in the direction of future supply.

Knight Frank’s Development Hotspots Index highlighted the Southeast and East of England as the best prospects for development with seven of its 12 hotspots in these regions.

Greater London had the second highest index score this year.