Dentists see goodwill rise to 100% of fee income

A company of surveyors has reported a marked increase in demand for both NHS and private practices across the North West of England, since the introduction of the new NHS dental contract in April 2006.

Although slammed by many – and with some dentists refusing to sign up to the agreement – time has turned in favour of the agreement, claim experts at Petty Chartered Surveyors.

And for the dental sector in general with more practitioners looking to set up from scratch or buy into existing practices.

The increased demand for public sector dental premises is now being matched by the goodwill figures, Petty is reporting, with some negotiated at 100% of the total fee income.

Those with good NHS contracts historically achieve the highest figures but a goodwill yield between 75-100% is now attainable.

Phil Kelly, partner at Petty Chartered Surveyors said: ‘With waiting lists on NHS dentists still incredibly high, it is easy to understand why those existing practices with a history, reputation and loyal customer base can command goodwill figures previously unheard of. We have witnessed unprecedented figures and are confident that this trend will continue into the foreseeable future for both NHS and private practices.’

Recent months have also revealed a trend from the ‘baby boomer’ generation of dentists who qualified in the 1960s and 1970s and are now looking to retire with most selling to eager associates keen to run their own practices following the 2006 contract and accessibility of UDAs now paid in advance. 

Those capitalising on the current market conditions are perfectly placed to demand a review of goodwill to be built into the agreement – whether on a lease or direct sale agreement.

Petty are leading experts in this field and can cite recent examples of sales across the North West and beyond where goodwill percentages have reached a record high.

A three surgery practice in South Manchester sold at £675,000 with a fee income of £630,000.

A leased surgery in Cheshire sold at £340,000 – 90% of its fee income and a four surgery leased practice in Leeds sold at £520,000 with a fee income of £570,000.

Established in 1928, Petty Chartered Surveyors offer a full range of property related services including bespoke valuation advice, commercial and residential agency, landlord and tenant services, compulsory purchase negotiations and rating advice.

For further information or advice, contact Phil Kelly on 01282 417778 or at [email protected]

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