Residential care costs "can soak up over 50% of property values"

The cost of an average stay in a residential care home can swallow up more than half the value of an individual’s house in some parts of the country, according to new research.
The findings, which show that the typical person entering residential care will face a total bill of £50,000-£93,000 depending on where they live, will fuel the debate about social care funding.
The chancellor, Philip Hammond, announced in this month’s budget that an extra £2bn would be granted to social care in England over the next three years. He also said the government would produce a discussion paper later this year that looks into how to fund social care in the future.
The new research from the mutual insurer Royal London, whose director of policy is the former pensions minister Steve Webb, found that variations in house prices around the UK mean the cost of a typical residential care home stay could range from 18% to 56% of the value of the average house.

It described the situation as a lottery and said many people were at risk of losing “a large part of the value of their home” if they were hit with such costs.
It said that for most pensioners, their house was likely to be by far the biggest asset on which they would need to draw to meet care home bills. For many, that will mean selling the family home to pay the fees.
For people in north-east England, where the average house price at the end of 2016 was just under £129,000, an average stay of 30 months in a local home costing £554 a week would eat up 56% of the value of their home. The total bill would be £71,000.
For those living in London, where the average house price is around £484,000, 30 months of residential care at a typical cost of £666 a week would only account for around 18% of the value of their home. The total bill would be £86,000.
The equivalent percentages for south-east England, East Anglia and the Midlands were 29%, 32% and 40-41% respectively.
The research relates to residential rather than nursing care. For those who need nursing care, the total bill is likely to be smaller because average stays in nursing homes are significantly shorter than those for residential homes,which more than offsets the higher weekly costs of nursing care.
Webb, a former Liberal Democrat MP, said successive governments had “failed to grasp the nettle” when it came to care costs, and that urgent action was needed.

Residential care costs "can soak up over 50% of property values"