Ask The Experts - Surgery Sale

Published:07/03/2008

Question

I became a GP partner eight months ago; have to decide whether to buy into the premises. The surgery is single –storey, old and cramped with inadequate car parking. It has been recently valued at £200,000 for residential use with the building being demolished. The partnership would like to sell it as soon as they can find a new site. Does the £200,000 represent only the land value? Also, would change of use need to be secured from the local authority? Have you any advice for the Partnership about how best to capitalise on the building? And any advice about whether I should buy in?

Answer

The property needs to be fully appraised and I can only make some general comments. The valuer may have been thinking in terms of demolition, site clearance and building new residential property. If this is the case, it is likely that £200,000 was the value of the site. The site's worth will be directly related to the two factors: the value of the residential property that could be built on the site and the cost of construction. If local residential values fall and costs rise, the site's value will fall.

With change of use from a surgery, it is prudent to check the local authorities will only grant change of use if it can be clearly shown that the medical /community use of the site is no longer required. This would normally be established if the surgery is moving to an alternative site. In your situation, it might be sensitive for you to seek independent advice (not from the partnership's advisers)