The current situation for care ...

By Derek Breingan

THERE is much to consider when undertaking a development project, but the recent impacts of some global events and those specific to the UK have added a more challenging dimension.

The backdrop to where the sector finds itself today is one of benign interest rates for a pro-longed period, as a consequence of the global financial crisis, and a long period of austerity.

This has, for many, become an interest rate environment that allowed for cheaper debt than had been available for a number of years.

Borrowing within the sector, certainly from Virgin Money experience, has grown year on year and many developments, extensions and refurbishments have been undertaken bringing much needed investment and new beds.

As of today however interest rates are rising therefore materially impacting the cost of any project where debt is needed.

Coupled with increased supply chain costs of materials due to double digit inflation this has resulted in some proposals being revisited to sense check viability.

The same project 10 months ago is now a much different and in some cases more marginal financial proposition if these are now factored in.

Availability of contractors appears to be good and a number continue to deliver projects within the sector.

It is however an environment which has impacts on these businesses also and therefore diligence on the contractor/professional team has become more in focus to ensure that, if progressing, they can see the project through.

It is clear therefore that all aspects of any project proposal being considered need to be forensically assessed.

From the costs of professionals, materials, labour, and finance, to the conclusion of time required to complete any development work, this analysis needs to be detailed.

In addition the ultimate investment