Acquisitions

There are over 11,000 practices in the UK. Over the last decade there has been an increase in the number of practices owned by larger corporate groups, although around two thirds of practices remain independently owned. According to Christie and Co's annual dental market report, 520 practices were sold in 2022 with around double that number marketed (1).

Recent years have seen a reversal in the market penetration of corporate buyers as opposed to smaller groups. In 2023, 31% of purchases were completed by corporates, but in 2024 this reduced to 18%. Market conditions could have played a part in purchasing behaviour with smaller buyers more reluctant to take commercial risks during earlier periods of instability and higher interest rates. Renewed economic stability may have reassured smaller buyers from 2024, alongside reduced corporate appetite, potentially due to reduced NHS revenue.

According to Christie, the stabilisation allowed for an overall recovery in practice acquisitions in 2024 (2).

One major factor noted by Christie’s in their analysis was the changes to Business Asset Disposal relief. Many small business owners take value from asset sales at the end of their careers as effective pension pots. These changes, along with capital gains tax, mean that the sale of a practice will be subject to higher rate in 2025 (14% as opposed to 10%) and higher still 2026 (18%). Changes to stamp duty, lowering the threshold by £125,000 to £300,000 will also affect the wider property market, which could have unforeseen knock-on effects on liquidity in the market.

The market for practices, whilst comparatively small, contains large investors as well as smaller family run, or partnership, practices. As most practices possess NHS contracts for delivering care, the financial aspect of transactions can take on extra complexity compared to other property purchases, even those in a commercial setting. Many dentists turn to commercial specialists to help them with transactions and the extra financial and legal hurdles. If you are an Extra or Expert member, you have access to unlimited one-to-one advice from our NHS and Business team who would be happy to assist you.

The dental property market has experienced similar shifts to the wider property and commercial market, owing to the importance of interest rate rises and wider economic shifts. Research from the Royal Institute of Chartered Surveyors, RICS (3) has indicated that the fourth quarter of 2024 saw a flattening of demand in the commercial property sector. Although they attribute some of this to tightening credit conditions, which has also reduced investment (4). This is likely related to some of the financial uncertainty between the UK 2024 Autumn budget and the US election.

Changes to practice UDA rates in England

NHS contractual payments in England vary wildly and UDA rates vary from region to region often mirroring access. Every year we analyse data from the NHS Business Services Authority (NHSBSA) to provide an estimated UDA value for all NHS contracts in England. Download our latest UDA value checker to compare your practice or the practice where you work to the local and national averages.

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