Your primary care property questions answered by a GP property expert.
A: Claire Lawrie explains…
Yes, however, all pharmacies are valued using the comparable method of valuation. The key is to adjust the comparables to a common basis of comparison.
Pharmacies co-located within medical centres will be valued based upon the business they can generate from that location, which is primarily linked to the patient numbers and script volume amongst other things.
A: Chris Kozlowski explains…
Yes you can. It doesn’t matter whether you are on a PMS, GMS or APMS contract, you can check and appeal against your notional rent assessment.
Contact GP Surveyors for further information.
A: Chris Booth explains…
GP contractors are eligible for rental reimbursements. The type of reimbursement depends on who owns the building.
You can move from ‘cost’ rent to ‘notional’ rent by application to NHS England.
Before considering switching you should seek specialist advice to ensure that switching is in your best financial interest.
A: Paul Conlan explains…
The new Multi-specialty Community Provider (MCP) contract is about delivering integrated care. This will be from either enhancing and developing existing premises or developed new centres for care.
Notional Rent payments only cover contracted medical services and these payments are likely to continue. However, the current Premises Cost Directions (PCD) do not seem to accord with the wider NHS vision for integrated care.
The PCD can be seen to discourage practices from undertaking any additional services, as any income generated from non-contracted medical services can be equitably off-set from their NHS England recurring premises cost reimbursements. Why would a practice take on an additional services when they will have the income generated directly deducted from them under the PCD. There is no benefit and additional costs upon the Practice and they are likely to lose money if they are not extremely careful.
We think the key to the question lies in what will be considered “contracted medical services” combined with an understanding of who will be responsible for funding the different contracted medical services.
Undoubtedly NHS England will only want to be responsible for recurring premises costs for their “contracted medical services” and will not want to pay for services provided on behalf of the Mental Health, Community Health or Foundation Trusts.
In our opinion a more reasoned and forward thinking strategy is required for premises providing front line services to deliver accessible and improved care.
A: Nikki Keeley explains…
There are unprecedented pressures on General Practice and ongoing Primary Care.
A 2015 national survey of GPs by the British Medical Association (BMA) reported that 34% of GPs intend to retire within the next five years and 17% are considering a change to work part-time.
When considering retirement from your GP practice, one must first establish if there is a need for ongoing medical care in that location and from the current building (at least in the short term). If there is need and support for continued care there is an initial consideration:
- Do you want to remain an owner of the building and become a Landlord?
or
- Do you intent to dispose of the building?
Options to consider if you want to keep your building:
- Find a successor (individual/company or another local practice) to replace you and take over the running of the GP Contract. Put a Lease in place to regulate the arrangement. This Lease can then be sold to another investor should your circumstances change in the future.
Options to consider if you choose to dispose of your building (building deemed part of ongoing care strategy):
- Sell the building and transfer the contract to a new medical provider (individual, company or another local practice). Please note that no consideration is payable for the transfer of contract and any value must be directly linked to the value of the building and its fixtures and fittings.
If your building is deemed surplus to requirements then you may have to retire, hand back your contract to the NHS and close the surgery (redundancy pay will need to be considered). Options at this point will involve planning:
- Planners may seek to protect the community use (where possible) and you may be forced to try and let/sell the building within this environment.
- Sell the building as an alternative use (vacant possession)/development opportunity (assuming planning approval obtained).
- Redeveloping site/building oneself (assuming planning approval obtained).
A retirement solution will depend on various factors and will vary based on individual circumstance.
A: Chris Kozlowski explains…
Please click here for the Department of Health reference guide.
Contact GP Surveyors for further information.
A: Paul Conlan explains…
It is essential that a lease is put in place to formalise the arrangement and responsibilities of the parties. The rent will be dependent upon the terms of the lease and it is not as simple as just paying the outgoing (retired partner) the current notional rent.
Where a building is owned by a third party and no lease is in place, the GP contractor has limited security and could be removed from the property in certain circumstances by the owner (potentially putting ongoing care from the location and their GP contract at risk). NHS England should recommend that GP Contractors in this situation enter into a lease.
NHS England also have a right to view the proposed lease before the GP Contractor signs it to ensure it is value for money and they are happy to reimburse the GP Contractor based upon the terms of that lease, as the property will shift from Notional Rent to Actual Rent (Premises Cost Directions).
It is standard practice to appoint a specialist surveyor who understands the intricacies of this sector and NHS rental reimbursement to draw up heads of terms for the lease (these terms when agreed are then passed to a Solicitor for drafting). The surveyor is essential as they are the appropriate person to advise on the appropriate rental valuations (Lease Rent/NHS Rental Reimbursement) and should ensure that whatever lease terms are agreed with Landlord are also agreed and acceptable to NHS England before matters move to Solicitors.
We are aware that certain bodies have attempted to provide generic guidance. However, every situation is different (especially the rent) therefore no template is appropriate.
A: Paul Hardman explains…
In majority of cases the price per square metre of any floor above ground is valued at 90% of the ground floor unit rate. This is subject to local agreements across various areas of the UK.
Should the property have a lift to the upper floors these will be valued at a same rate as the ground floor.