Newspapers and other journalists’ outlets are reporting that rooms in care homes are being offered to purchase as buy to let investments with a claim of returns of up to 188 per cent over 10 years.
The Bureau of Investigative Journalism, which broke the story, says the schemes are not regulated by the Financial Conduct Authority while the Care Quality Commission, which oversees standards in care homes, says it does not have responsibility for providers’ financial sustainability.
The Bureau’s report says that through email marketing campaigns and investment seminars, investors from the UK, Europe, Asia and Africa to buy leases on rooms for up to £85,000.
Leases are registered with the Land Registry and in some cases there are guarantees up to 12 per cent annual rental income over 10 years as well as pledges to buy back the rooms for a 25 per cent mark-up at the end of that period.
The Bureau quotes Labour MP Ben Bradshaw, a former health minister who sits on the House of Commons Health Select Committee as saying: “We are dealing with elderly people, often at their most vulnerable and the records of some of those involved in this business does not instil confidence. Ministers need to look urgently at the findings of the Bureau of Investigative Journalism and reassure themselves and the public that vulnerable elderly people and investors are not at risk.”
The Independent newspaper says a Department of Health spokeswoman said it was investigating.
You can see the BIJ report here.