Should I consider buying an NHS dental practice? 

We’ve seen a real shift over recent years in the desirability of NHS dental practices with prospective buyers. With many NHS practices choosing to convert to private, it’s no wonder that buyers may feel an NHS practice or mixed practice is no longer a sound investment. However, NHS dentistry still presents a really viable option for a buyer when they’re looking to take on a new business.  

Here are some things to consider when it comes to buying a practice with an NHS element: 

Banks are very keen to lend on NHS practices
Part of this is due to the stability of the income. As an owner of an NHS dental practice, you know what’s coming into the practice every month and you know how much money you have available to pay your associates and work with. Essentially the NHS contract can cover your overheads, allowing you to offer complementary private dental treatments to drive profitability.   

UDA rates can vary in profitability
Since the NHS contract reform, there is a vast disparity in UDA rates paid to practices; for practices with a minimum UDA value, it is becoming more challenging to maintain profitability whereas practices with higher UDA rates generally remain profitable; careful selection when purchasing a practice is therefore key!

With a higher UDA rate, practice owners can respond to the higher UDA values being commanded by associate dentists, aiding associate retention. It is worth considering that with less providers willing to deliver NHS dentistry, some practices have successfully negotiated increased contract values. 

 

 

Staff retention
More associates are looking to work on a part-time basis so delivering a contract with a substantial number of UDAs can be difficult. Associates generally prefer to work with private patients rather than NHS which is driving a competitive market for NHS dentists. This means practices are having to pay substantially more per UDA to associates than even 12-18 months ago. 

Practices in urban areas can be more profitable
A dental practice in an urban area is often less affected by UDA rates than their rural or costal counterparts largely due to a greater availability of associate dentists willing to undertake UDAs. The availability offers an allocation of fewer UDAs across a broader clinical team, allowing Associates to provide a mix of treatments and increase job satisfaction 

Annual uplifts
The annual uplift in NHS contracts can help practices off-set rising costs such as the annual increase in National Minimum Wage for support staff; particularly in the last couple of years where practices have been awarded higher annual uplifts due to the high inflationary pressures. NHS dentistry also provides partial protection against the economic climate.  

Value of NHS Practices
The latest NASDAL Goodwill Survey for the quarter to 31st October 2024 confirms NHS goodwill made a strong return to 175% of gross fees. The value of mixed practices was also higher at 154% of gross fees than fully private practices at 143%. Despite the turbulence associated with NHS dentistry over the last few years, these statistics confirm the continued premium for NHS dental goodwill, with both independent and corporate buyers still valuing the security an NHS contract brings. 

Register as a buyer  

Whether it’s your first or twentieth practice, our expert consultants are here to guide you through every step of the way of buying a dental practice. 

We offer three buying tiers with a range of benefits: 

1. General Market Buyers – benefit from no membership fees, alerts to new practices to market, buyer-seller viewings arranged and access to Henry Schein Financial Services for practice funding 
2. Priority Tier Buyers – enjoy all the benefits of a general market buyer plus early access to practice particulars, priority viewing slots and opportunity to secure purchase opportunities before they reach the open market 
3. Premier Tier Buyers – enjoy all the benefits of a Priority Tier Buyer plus closed-market buying pool, opportunity to secure larger practices suited to corporate ownership, fast-tracked practice marketing documents, opportunity to purchase practice groups and an account manager offering a network of Henry Schein Services 

Register as a buyer or update your buyer requirements here