Estate Living Magazine Estate Living Issue 29 May | Page 50

Retirement planning,
diversifying investment
to UK care homes
How the UK care and
retirement property sectors
could provide diversity of
income
elderly already in their care, and with the increased pressure on
services, their struggle will be almost impossible to overcome.
In eight years, there will be a shortage of approximately 71,000
care beds as there will be an additional 353,000 older patients
with complex care need, according to research conducted by a
team of Newcastle University academics.
The UK’s population is ageing, due to medical advances and
an improved quality of life. Whilst it is nice to think that more
people will live long and healthy lives, unfortunately this is not
always the case, and many develop health problems in their
later years which may require extensive care. The significant
increase of an elderly population, coupled with the decrease in
those of a working age, means the UK government is struggling
increasingly to raise funds to cover the cost of their care.
In three decades to 2045, one quarter of the population in
the UK will be aged 65 or older. The government and local
authorities are already struggling to meet the needs of the
At the intersection where urgent need meets dramatic under
supply is where great potential profits can be found. And
looking at the South African investment landscape, it makes an
even more compelling case.
Although the repo rate in South Africa has been slashed by
25bps from 6.75% to 6.5%, which typically causes house price
growth, those with savings will see a much lower return.
Since the rand has appreciated relevant to the pound (about
16.79 ZAR to 1 GBP), it may be a good time to consider
diversifying a property investment portfolio
to include overseas property while the rand
is strong. If investors keep their savings
in a South African bank account, they will
be achieving a lower, risk-adjusted return
on their money. With the backdrop of the
land expropriation issue, there is more
uncertainty than is priced in now with the
positive Cyril effect.
Within the next five years the impact of
the Brexit negotiations should have taken
its effect; one could expect the pound
to appreciate, thereby benefiting those
selective investors from both a capital
gains and income perspective. There is
also the altruistic element to investing in
the undersupplied UK care home sector.
However it does not come without risks.
50 | www.estate-living.com