Our care home proposition — what we’re doing to improve it

The UK has an ageing population. Nearly one in five people in England and Wales are aged over 65 — the highest proportion ever recorded (2021 census). And, it’s estimated that by 2039, around one in every four people will be aged 65 and over (ONS). Demand for social care is set to rise dramatically, and this will require a significant improvement in elderly residential capacity.

And yet, the total number of beds in both nursing care homes and residential care homes for older people has fallen from 11.3 per 100 people to 9.4 between 2012 and 2021, a decline of 12% (Public Health England, 2021). Closures and the reduced financial viability of care homes have been driven by a number of factors, including financing and difficulties recruiting and retaining staff. This has been compounded by more recent issues linked to the UK’s withdrawal from the European Union and the COVID-19 pandemic.

Alongside these issues, the demand for specialist care is rising because of growing numbers of working-aged disabled adults living longer and with more complex needs. There’s also a significant shortage of appropriate places for local authorities to place children in need of care — less than a third have access to enough residential homes for those aged 14-15 (NAO).

What we’re doing to provide support for care homes

The SME care home market has been drastically underserved by lenders (as reported in the Guardian). Since Atom bank was launched, we are proud to have lent close to £100m to the health and social care sector supporting both new entrants and existing care operators. However, we want to go further in our support.

In addition to increasing our maximum loan size in support of larger, purpose-built care homes, we recently expanded our care home offering to enable Atom bank to serve more businesses in this sector:

Specialist care homes

This includes homes providing care in specialist categories e.g. learning or physical disabilities. Care homes must meet the following requirements:

• Minimum of two years’ experience or clear transferable skills
• Minimum number of four beds
• Minimum Care Quality Commission (CQC) rating of ‘Requires improvement’ with evidence that the applicant has a successful track record of operating homes at a standard of at least ‘Good’.

Care homes that meet the requirements can apply for the following maximum loan-to-value (LTV):

• 75% LTV: Experienced operators with purpose built homes with an ‘Outstanding’ or ‘Good’ CQC rating
• 70% LTV: Experienced operators with an ‘Outstanding’ or ‘Good’ CQC rating
• 70% LTV: Experienced operators with a ‘Requires improvement’ CQC rating with evidence of a successful track record of operating homes at a standard of at least ‘Good’.

Children’s homes

Children’s homes must meet the following requirements:

• Minimum of two years’ experience or clear transferable skills
• Minimum number of four beds
• Minimum Ofsted rating of ‘Requires improvement’ with evidence that the applicant has a successful track record of operating homes at a standard of at least ‘Good’.

Children’s homes that meet the requirements can apply for the following maximum LTV:

• 75% LTV: Experienced operators with an ‘Outstanding’ or ‘Good’ Ofsted rating.

These changes follow feedback from our intermediary partners and we expect that these enhancements will allow many more operators in the sector to strengthen and scale their businesses at this pivotal moment.