Commercial Mortgage for Doctors
A commercial mortgage for doctors is a property-secured loan used to purchase or refinance the premises from which a medical practice operates. What separates healthcare lending from standard commercial mortgages is the treatment of NHS income. GP surgeries, dental practices and pharmacies with NHS contracts benefit from lenders who understand government-backed income streams, and for qualifying NHS-contracted GP surgeries that opens the door to up to 100% LTV.
FD Commercial arranges commercial mortgages for medical practices from £250,000 across England, Scotland and Wales. We have full access to market, including specialist healthcare lenders whose criteria most generalist brokers cannot reach. No broker fee in most cases.
How GP surgery mortgages work
GP surgery finance is built around a concept called notional rent. Notional rent is the amount NHS England would pay if a surgery were leased rather than owned by the practice. It is set by District Valuation Services and reviewed periodically. Because it arrives as a predictable, government-set payment regardless of patient list movement, lenders treat it as primary serviceability income rather than applying the haircuts they would to ordinary commercial income.
This is why GP surgeries achieve higher LTVs than almost any other commercial property type. Where mainstream commercial lenders see an owner-managed business, specialist healthcare lenders see a government-contracted provider with a reliable income floor. A practice with strong notional rent coverage can access 70 to 80% LTV on the property alone, with the remaining acquisition cost funded through a goodwill loan arranged alongside.
Affordability is assessed using the Debt Service Coverage Ratio (DSCR). Lenders require notional rent to cover annual mortgage repayments at 130 to 170%, depending on the lender and LTV sought. A surgery with notional rent of £60,000 per year supports annual mortgage repayments of up to £46,000 at a 130% DSCR threshold.
NHS registration, CQC compliance and a current NHS contract are essential. Lenders review contract term, patient list size and practice income history as part of underwriting. Cases with a recent NHS contract transfer, a new principal or a short trading history require specialist placement and are not suitable for mainstream commercial lenders.
LTV by practice type
LTV is determined by the security type and the nature of the NHS income underpinning the case. GP surgeries with NHS contracts consistently achieve the highest LTVs. Dental practices, pharmacies and private clinics follow in descending order of income predictability as viewed by lenders.
| Practice type | Typical LTV | Max LTV | Affordability basis |
|---|---|---|---|
| GP Surgery (NHS contracted) | 70–80% | Up to 100% with goodwill loan | Notional rent at 130–170% DSCR |
| Dental Practice (NHS majority) | 80–90% | Up to 100% for qualifying practices | NHS UDA contract income, DSCR basis |
| Dental Practice (mixed/private) | 65–80% | Up to 85% | Blended NHS/private income; private income assessed with haircut |
| Pharmacy (NHS dispensing) | 65–75% | Up to 75% | NHS dispensing income primary; OTC income discounted |
| Private Medical / Specialist Clinic | 60–70% | Up to 70% | Recurring private income; 3 years minimum trading required |
| PropCo with practice lease | 65–75% | Up to 75% | Notional or market rent confirmed in lease agreement |
These ranges reflect general market conditions. Individual lender criteria, practice income history and property type determine actual offers.
Jigsaw finance: buying your surgery without a deposit
Jigsaw finance describes the combination of two separate lending facilities used to fund the full cost of a surgery acquisition. The commercial mortgage covers the property element, typically at 70 to 80% of the property value. A goodwill loan, arranged alongside it, covers the goodwill payment, which represents the value of the patient list, NHS contract and trading reputation of the practice.
Used together, the two facilities can fund the complete purchase price of a qualifying NHS-contracted GP surgery without requiring a cash deposit. Goodwill loans are secured against the practice goodwill rather than the property and typically run on shorter terms than the commercial mortgage, usually up to 15 years.
100% funding via jigsaw finance is not available to every practice. The surgery needs a strong NHS contract with consistent historical delivery, a clean credit history and a patient list that demonstrates income stability. New principal purchases from retiring GPs are the most common scenario: the existing patient list and NHS contract underpin the goodwill valuation on which the loan is based.
We manage the coordination between the two facilities, which reduces the risk of timing mismatches between the two loan completions and simplifies the overall process.
Dental practice commercial mortgages
Dental practices follow the same broad framework as GP surgeries, with NHS UDA contract income replacing notional rent as the primary DSCR measure. Specialist healthcare lenders assess UDA contract values directly, modelling DSCR against contracted income rather than applying a generic business income haircut that would understate NHS income reliability.
NHS-majority practices typically access 90 to 100% LTV on freehold property, provided the UDA contract has been consistently delivered over at least two to three years. Mixed NHS and private practices achieve 75 to 90% LTV depending on the income split. Capitation income from schemes such as Denplan is treated more favourably than pure fee-per-item private work because of its predictable monthly payment structure.
For more detail on dental practice borrowing, see our commercial mortgage for dental practices page.
Pharmacy mortgages
NHS-contracted pharmacies access commercial mortgages up to 75% LTV on the property element. Lenders treat NHS dispensing income as the primary serviceability figure, with over-the-counter retail income discounted or excluded from affordability calculations. Dispensing volume history, NHS dispensing contract documentation and accounts showing stable NHS income are the key underwriting requirements.
Pharmacies with a significant retail income alongside dispensing present a more complex underwriting position. Specialist lenders with healthcare sector experience can model these cases accurately; mainstream commercial lenders typically apply blanket haircuts to the entire revenue line, which understates serviceability and reduces the loan available.
Partnership and PropCo structures
Most GP surgeries are held by partnerships rather than sole practitioners. Lenders are familiar with joint and several liability structures across multiple partners, and facilities can be structured to reflect individual partner ownership shares. Where a partnership is buying from a retiring principal, the NHS contract transfer process and patient list retention are assessed as part of the underwriting.
A PropCo structure places the surgery property in a separate limited company or partnership vehicle, with a lease back to the trading practice at notional or market rent. The PropCo takes the commercial mortgage; the practice pays rent that services the debt. This separates property risk from the trading business, simplifies partner entry and exit, and allows rent to be drawn from the practice in a tax-efficient way.
PropCo lending requires lenders with specialist appetite. Not all healthcare lenders will consider the structure, and the lease terms, notional rent level and DSCR position must each be correct before approaching the market. We advise on the appropriate structure before lender selection and identify lenders most likely to offer terms on the first approach.
For practices that have already received a high street bank offer that did not meet expectations: specialist healthcare lenders regularly produce better terms at the same or higher LTV. Cases declined by clearing banks at standard gearing frequently complete at higher gearing through specialist lenders whose underwriting is built around NHS income.
Case study: GP partnership surgery purchase
Scenario. A four-partner GP practice instructed us to acquire the freehold of their NHS-contracted surgery. Patient list of approximately 7,500. The partners wanted to hold the property through a PropCo with a lease back to the practice at notional rent.
The problem. Their existing bank had offered 70% LTV with a 1.5% arrangement fee. The partners wanted better terms and needed the PropCo structure to be accepted by the lender.
What we did. We placed the case with a specialist healthcare lender with appetite for PropCo surgery lending. Notional rent covered annual interest at 148% DSCR, above the lender threshold. We secured 72% LTV at a materially lower rate on a 20-year term with a three-year interest-only option. No arrangement fee. No broker fee.
Loan arranged: £1.1m at 72% LTV. Completed in 10 weeks from instruction.
What lenders need from you
For an existing practice purchasing or refinancing its own premises, the core documentation is two to three years of filed accounts, management accounts if the most recent year-end is more than six months old, your NHS contract or GDS/PDS dispensing agreement, CQC registration and most recent inspection report, and a commercial valuation of the property.
For a practice acquisition, lenders additionally require details of the patient list and evidence of NHS contract transfer or assignment. Where goodwill is being financed alongside the property, the goodwill purchase price and the method of valuation are required. For PropCo structures, the lease agreement and a notional rent confirmation letter from NHS England are essential at the point of application.
Timeline from formal application to completion is typically eight to twelve weeks. PropCo structures and partnership agreements with multiple parties add complexity. CQC registration, if not already in place for a new principal, takes ten to twelve weeks to process and should be started before the mortgage application to avoid delays.
Frequently asked questions
Can I get 100% finance to buy my GP surgery?
Yes, in some cases. Full funding is achieved through jigsaw finance: a commercial mortgage on the property combined with a goodwill loan against the practice goodwill value. This is available for qualifying NHS-contracted surgeries with an established patient list and clean financial history. Each case is assessed individually.
What is notional rent and how does it affect my mortgage?
Notional rent is the NHS England-set figure representing what they would pay if your surgery were leased rather than owned. Lenders treat it as the primary DSCR income because it is a government-guaranteed payment that does not depend on patient list changes. It is the main reason GP surgeries achieve higher LTVs than most commercial property types.
What is jigsaw finance?
Jigsaw finance combines a commercial mortgage secured on the surgery property with a goodwill loan secured against the practice goodwill: the patient list, NHS contract and trading reputation. Together, the two facilities can fund the full purchase price of a qualifying NHS-contracted surgery without a cash deposit. Goodwill loans typically run on shorter terms of up to 15 years.
Do I need a PropCo to buy my surgery?
No. You can purchase in the names of the partners directly or as an individual. A PropCo offers tax advantages and simplifies future succession but adds legal complexity and requires a formal lease between the property vehicle and the practice. We advise on the merits of each structure before approaching lenders.
Can a dentist or pharmacist get the same terms as a GP?
Not identical terms. GP surgeries attract the highest LTVs because notional rent provides a government-backed income guarantee. Dental practices can access up to 100% LTV where NHS income is the majority revenue and UDA delivery is consistent. Pharmacies typically access up to 75% LTV. Specialist healthcare lenders understand each profession and do not apply generic commercial underwriting criteria.
What if the high street bank has already declined?
A bank decline does not close the market. Specialist healthcare lenders sit outside mainstream panels and underwrite specifically against NHS income criteria that bank systems are not designed to recognise. Cases declined at lower LTVs by clearing banks regularly complete at higher gearing through specialist lenders. The issue is almost always lender selection, not the case itself.
How long does a medical practice commercial mortgage take?
Typically eight to twelve weeks from formal application to completion. PropCo structures, partnership documentation with multiple parties and CQC registration requirements each add time. Well-prepared cases with clean accounts, an established NHS contract and standard security complete at the faster end of that range.
Does FD Commercial charge a broker fee?
In most cases, no. We are paid by the lender on completion. Where a borrower fee applies on unusually complex cases, it is agreed and disclosed in full before any work begins. There are no hidden charges.
All rates and figures shown are indicative only and subject to lender assessment, credit profile, and market conditions. Rates may change without notice. Your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
FD Commercial arranges commercial mortgages for GP surgeries, dental practices, pharmacies and private clinics from £250,000. Full access to market. No broker fee in most cases.
Call 03300 100315