I am working as a locum at a practice. The solo GP's spouse is the practice manager and they both plan to retire soon.
If I can take over the practice, they will let me buy the premises (purpose-built in the 1980s).They want £700,000 for the building plus £200,000 for the fixtures and fittings.
The notional rent is currently £23,450 a year (grossly below what a surgery worth £700,000 should attract) and is due for review in 2010.
I think the premises are only worth £300,000, while the couple claims they were valued at £800,000 in 2007. However, they have no documentation to support this. They simply say they reduced the price because of the credit crunch.
I suggested the GP takes me into partnership and leases the surgery to me but this was unacceptable because it may attract the taxman's attention.
How I can convince them to sell at a reasonable price?
Even with a reasonable increase next year, the current notional rent does not suggest a realistic relationship to a valuation of £700,000.
There are reasons why the market value could vary greatly, one being if the site is not fully developed and there is room for expansion; another is that the alternate use value exceeds its value as a surgery.
The most likely scenario is suitability for residential redevelopment. In some high-value residential areas, it is possible that a 'dated' surgery has a value less than the residential development land on which it sits.
If the owners are being unrealistic, the only real way to try to persuade them would be to have a full report on the surgery value and alternate value by a surveyor, including how the figures may have altered over the past couple of years.
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