Financing a GP surgery: buying in, premises and partnership
The short version
- Financing a GP surgery splits into two separate questions: buying into the partnership (the practice as a going concern) and buying the premises (the building itself).
- A premises purchase is usually arranged on a commercial mortgage, supported by the NHS notional rent the practice receives towards occupancy costs.
- Buy-in costs vary widely by practice, from a few thousand pounds of working capital to a six-figure property share, so there is no single national figure.
- We are an arranger and introducer, not a lender. Most commercial lending here is unregulated, though a loan secured on your home is regulated and referred to an authorised firm.
- Lenders look at the practice accounts, the NHS income stream, the property valuation and the strength of the partnership before agreeing terms.
Buying a GP surgery means two different things, and confusing them is the most common reason a first conversation about finance goes nowhere. One is buying into a partnership, taking a share of the practice as a trading business. The other is buying the premises, the bricks and mortar the practice works from. They are financed differently, valued differently and carry different risks.
This hub gives you the overview and then points you to the detail. We arrange the finance behind these deals every week, so the pages below are written from what lenders actually ask for, not from theory.
In this guide
Buying in versus buying the building
When a salaried GP becomes a partner, they buy a share of the practice. That can include a share of the working capital (the cash the practice needs to keep running between NHS payments) and, where the partners own their building, a share of the property. These are two separate sums and they are funded in different ways.
| What you buy | Typical scale | How it is usually funded |
|---|---|---|
| Working capital share | Low thousands to tens of thousands | Partnership loan or personal funds |
| Property share | Tens of thousands to a six-figure sum | Commercial mortgage on the building |
| Goodwill | Usually nil for NHS GP practices | Not normally paid in NHS general practice |
Goodwill is worth a word. The sale of goodwill in NHS general practice has been prohibited since the NHS (Primary Care) Act 1997, so an incoming partner does not normally pay for the practice list. That is very different from buying a dental or pharmacy business, where goodwill is often the largest figure on the page. If you are weighing primary care against those sectors, our guide to buying into a GP or dental partnership sets the two side by side.
Financing the premises
Where partners own their surgery, the building is usually held on a commercial mortgage and the NHS pays a notional rent towards the cost of occupying it. That reimbursement is the engine of the whole structure: it is the income stream a lender underwrites against, and it is why a well-run owner-occupied surgery can be a defensible place to hold debt.
The notional rent is not a grant towards the mortgage; it is a reimbursement of premises costs that the partners then choose how to use. Lenders treat it as quality income because it comes from the NHS.
How that reimbursement is set, reviewed and capped is its own subject. Our guide to GP premises and NHS notional rent reimbursement goes through the District Valuer process. For the decision itself, whether to own at all, read buying your own surgery premises.
You can model the monthly cost of a premises loan with our commercial mortgage repayment calculator, and check how much you would need to put in with the loan-to-value calculator.
What it costs at each stage
There is no single price for buying a GP surgery, because the cost depends on whether you are buying in, building from scratch or running an established list. The spokes below break the numbers down, but here is the shape of it.
For the partnership buy-in, see the cost of buying into a GP partnership. For the cost of opening a practice from the ground up, see what it costs to open a GP surgery. And to understand whether the business stands up financially before you commit, read are GP surgeries profitable.
What lenders look at
A lender assessing a GP surgery deal is really assessing three things: the income, the property and the people. The NHS contract and the practice accounts speak to the income. The valuation speaks to the property. And the partnership agreement speaks to whether the structure holds together if a partner leaves.
The accounts
Two to three years of practice accounts, showing the NHS income, the premises reimbursement and partner drawings.
The valuation
An independent valuation of the building, which sets the maximum loan against the loan-to-value the lender will offer.
The partnership
The partnership agreement and the deposit or contribution each partner is making.
The personal position
Your own income, any existing borrowing, and whether the facility touches your home, which would make it regulated.
Our GP surgery finance page sets out the products we arrange and how we package a case to a lender.
How to use this hub
Start with the question that matches your stage. If you are a salaried GP being offered a partnership, the buy-in cost is your first stop. If the partnership is deciding whether to buy its building, the premises page is yours. If you are checking the business case before any of that, the profitability page does the groundwork.