Buying your own surgery premises: the finance explained
The short version
- Owning your surgery premises means holding the building on a commercial mortgage, with the NHS notional rent reimbursement helping to cover the cost of occupation.
- Lenders typically advance a share of the property value, so the partners fund the balance as a deposit; the loan-to-value sets how much you need to put in.
- The notional rent is the income a lender underwrites against, which is why a well-reimbursed surgery can support a sensible level of debt.
- Owning builds an asset for the partners; leasing keeps capital free and risk off the partners' books. Neither is automatically right.
- We are an arranger and introducer, not a lender, and commercial property lending is generally unregulated; a loan touching your home is regulated.
Whether a GP practice should own its building is one of the bigger financial decisions a partnership makes, and it is one people often approach back to front, starting with the mortgage rather than the rent. The right order is the other way around: understand the NHS notional rent first, because that reimbursement is what makes owning a surgery work financially, then look at the loan that sits on top of it.
This page explains how a premises purchase is financed, what a lender will want, and how owning compares with leasing. We arrange these commercial mortgages, so it reflects what lenders actually offer rather than a textbook.
How notional rent makes ownership work
When a GP practice owns and occupies its premises, the NHS pays a notional rent: a reimbursement towards the cost of providing the building, set by reference to the open market rent the premises would command. The District Valuer assesses it, and it is reviewed periodically. That reimbursement is the reason owning a surgery is financially viable, because it gives the partners a recurring, NHS-backed income against which to hold a mortgage.
A surgery building is unusual among commercial property: the occupier is effectively reimbursed for occupying it. That is what turns a premises mortgage into a manageable cost rather than a drain on partner drawings.
How the notional rent is assessed, reviewed and capped is a subject in itself. Our guide to GP premises and NHS notional rent reimbursement walks through the District Valuer process and what can reduce or limit the figure.
The commercial mortgage and your deposit
A surgery purchase is usually funded with a commercial mortgage. The lender advances a proportion of the property value and the partners fund the rest. That proportion is the loan-to-value, and it determines how much cash the partnership needs to find.
| Property value | Loan at 70% LTV | Deposit required |
|---|---|---|
| 500,000 pounds | 350,000 pounds | 150,000 pounds |
| 750,000 pounds | 525,000 pounds | 225,000 pounds |
| 1,000,000 pounds | 700,000 pounds | 300,000 pounds |
Loan-to-value on healthcare premises is often more generous than on ordinary commercial property, precisely because the NHS income stream is so dependable, but it still varies by lender and by the strength of the practice. Use our loan-to-value calculator to see the deposit at different levels, and our commercial mortgage repayment calculator to model the monthly cost.
What lenders look for
A lender assessing a surgery purchase is underwriting the income before the building. The notional rent and the practice accounts tell them whether the cost is affordable; the valuation tells them what the building is worth; the partnership tells them whether the structure survives a partner leaving.
The notional rent
Evidence of the current reimbursement and its review history, because this is the income that services the loan.
The valuation
An independent valuation that sets the maximum loan against the lender's loan-to-value limit.
The accounts
Two to three years of practice accounts showing NHS income and surplus.
The partnership
The partnership agreement and how property shares pass when a partner joins or retires.
Our GP surgery finance page sets out the lenders and products we work with and how we package a premises case.
Owning versus leasing
Owning is not automatically better than leasing. Owning builds an asset the partners hold and benefit from, and the notional rent helps service the debt. Leasing keeps the partners' capital free, takes the property risk off their personal books, and avoids the complications of property shares changing hands every time a partner joins or retires.
The right answer depends on the partnership's appetite for property risk, how long the partners expect to stay, and the state of the building. A surgery that needs major investment is a different decision from one that is move-in ready. If you are weighing the buy-in alongside the property, read the cost of buying into a GP partnership, and for the wider picture see our pillar on financing a GP surgery.
Buying premises and the NHS, including Scotland
The notional rent reimbursement framework applies across NHS general practice, but the detail differs between the four nations. In Scotland, a long-running programme has seen NHS bodies take ownership of a number of GP premises rather than partners owning them, which changes the calculation for practices there. The principle of reimbursement holds across the UK, but the route to ownership, and whether ownership is even on the table, depends on where you practise.
Whatever your nation, the financial questions are the same: what does the building cost, what will the NHS reimburse, and how much do the partners need to put in. Those are the questions we can help you answer before you commit.