Scotland is on a different path from the rest of the UK, and advice written for England does not transfer.
What the 2018 contract changed
Under the 2018 Scottish GMS contract, the Scottish Government and BMA Scotland agreed a national code of practice for GP premises. It sets out a transition, over 25 years, to a model in which GPs are no longer expected to provide their own premises.
That is a fundamental difference from England and Wales, where GP premises ownership remains the norm. It changes what funding is appropriate, and it changes the questions a Scottish practice should be asking.
Sustainability loans
Practices owning their premises have been able to take interest-free sustainability loans worth up to 20% of existing-use value. The loans are repayable when the premises are sold or cease to be used for primary medical services under a health board contract.
They have no effect on notional rent or borrowing cost payments, and there are no abatements as a result of taking one. Health boards can also acquire the premises in exchange for cancelling the outstanding loan, with the practice then having the option of a lease back.
For a practice, the loans reduce the capital tied up in the building, make partnership less expensive for an incoming partner, and ease the destabilising effect of a partner retiring with significant premises capital.
Leased premises
For practices leasing from third-party landlords, there is a planned programme transferring those leases to NHS boards. That removes the practice from the landlord relationship and the maintenance obligations that come with it.
What this means for funding
Two practical consequences.
First, the market for conventional surgery purchase mortgages in Scotland is shrinking by policy design. A practice considering buying its premises now should think carefully about where that sits against a 25-year transition.
Second, and more usefully, releasing premises value has become the live conversation. When the Scottish Government provided practices with existing-use valuations for sustainability loan purposes, it drew attention to what surgeries are actually worth, and for many partnerships that was more than expected.
Sale and leaseback has become one of the few routes for current partners to realise that value. See GP surgery sale and leaseback.
Practical differences beyond the contract
- Property transactions in Scotland run through missives rather than exchange and completion, on a different timeline
- Security is taken by standard security rather than a legal charge
- Property tax is Land and Buildings Transaction Tax, not Stamp Duty Land Tax
- Not every lender on a UK panel lends in Scotland, and fewer still understand the 2018 contract
For the buying process itself, see buying a practice in Scotland.
Common questions
Should a Scottish practice still buy its premises?
It depends on the practice, the timing and what the partners want from the next decade. There is no single right answer, but the decision should be made with the transition in view rather than as though nothing had changed.
Does a sustainability loan affect other borrowing?
The loan itself does not affect notional rent or borrowing cost payments. Its interaction with any commercial facility needs looking at case by case, and it does sit as a secured liability.
Is advice written for England reliable in Scotland?
No, and that is the main point of this page. The contract position, the property law and the tax are all different. Ask any adviser directly whether they have placed Scottish GP premises deals.
All figures are indicative and subject to lender assessment, your circumstances, valuation and prevailing market conditions. Commercial mortgages and unregulated bridging loans are not regulated by the Financial Conduct Authority. Property offered as security may be at risk if you do not keep up repayments.