Is investing in care homes ethical?

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When you think “care home”, do you think: “views of open parkland, comfy chairs and somewhere peaceful to be looked after when you can no longer care for yourself”? Or do you think: “urine-soaked sheets and Panarama elderly abuse investigations”?

The truth is probably a bit of both. Care standards do vary a great deal, from the appalling scenes that most of us have cried about on TV to the glossy brochures you want to believe.

With an ageing population, a growing number of whom live far from family, the “fundamentals” of investing in care homes are clearly sound, ie. demand for them exceeds supply.

That’s also a reason it can be very pricey for the person going into one. £35,000 to £40,000 for one year is not unusual – many individuals have to sell their homes or take out a lifetime mortgage to cover the cost. around 135,000 people go into a care home every year, according to Independent Age, a charity.

The excess demand relative to supply might also have an impact on quality, in other words, care homes don’t have to be amazing, if so many people have no choice but to just go into one if a space becomes available.

Care homes also provide a vital service. At their best, they offer kind and attentive physical and pastoral for the very elderly, as well as peace of mind for relatives.

Julia Dreblow, founder of Fund EcoMarket, the responsible fund finder for investors, says: “In brief – generally care homes are ethical – but in my experience – they are not always very user friendly for the elderly, ill or vulnerable if they are having to sort out their own affairs and are not IT savvy, which realistically is probably many of the people who need them most.”

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Downing Crowd, the crowdfunding platform from Downing, has almost raised the maximum £3 million to fund a brand new Edinburgh care home, run by Care Concern Holdings Limited. The bond will return 5.5% to investors after the one-year term (there’s still space for new investors in this raise, but not much).

Care Concern Holdings has exemplary reviews on the NHS website, which bodes well if you are interested in investing, but not sure whether care homes represent a responsible option.

Downing says: “We are pleased to partner with Care Concern Group, with whom we have worked on more than £30 million of care home investments. The home has been recently refurbished and we are proud to provide the local community with a premium-quality residential care facility.”

Good care homes and the companies that run them need to grow and expand, so that more and more old people can have the benefit of a decent place to see out their days.

Investing in care homes doesn’t have to be a cynical punt on an ageing demographic trend, but rather, a way of supporting a service that can make a huge difference to people’s lives when they need it.

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Rebecca O'Connor

Rebecca O'Connor, a financial journalist, is co-founder and director of Good With Money. Formerly a staff writer at The Times, she covered personal finance and business for eight years before going on to spend three years as communications director at Trillion Fund, a renewable energy crowdfunding platform. Rebecca writes about personal finance regularly for The Times and The Spectator and has written articles for The Observer, The Guardian, Huffington Post, The Ecologist, Moneysupermarket.com, Energydesk, Moneywise, BusinessGreen and Ethical Consumer.

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