Across the UK, demand for modern, integrated medical centres continues to rise. As primary care evolves and community-based healthcare expands, GP partnerships, pharmacists, private operators, and multi-disciplinary providers are increasingly seeking purpose-built premises. These centres often combine GP consulting rooms, pharmacy space, diagnostic facilities, treatment areas, dental suites, consultant rooms, and shared clinical services under one roof.

Yet development finance for medical centres has historically been difficult to navigate. Many borrowers assume that development lenders treat medical premises like any other commercial asset. In reality, healthcare sits in a category of its own. In 2025, lenders have made one of the most significant shifts in underwriting approach seen in years: new medical centres are now among the most attractive development assets for specialist lenders, and in the right circumstances, 100% funding is achievable.

Willow Private Finance has seen a surge in enquiries from GP practices considering relocation, landlords seeking to convert older surgeries into larger modern hubs, pharmacists expanding into clinical services, and private providers establishing standalone diagnostic or outpatient centres. Many come to us after receiving poor guidance from generalist lenders who do not understand the NHS covenant, healthcare service demand, or clinical property valuations—and who therefore incorrectly decline or restrict borrowing.

To understand why lender appetite has grown so rapidly, borrowers may also find helpful context in our articles Medical Practice Property Finance in 2025  and Buying a GP Surgery in 2025. Those exploring phased construction or major upgrades can also refer to Short-Term Property Finance in 2025.

This article focuses specifically on new medical centres—how they are financed in 2025, how lenders view development risk, when 100% finance becomes viable, and what operators must prepare to secure the strongest outcome.

Market Context in 2025

The UK healthcare system is undergoing profound change, driven by sustained population growth, record demand for primary care, and an ageing demographic. These pressures have accelerated the shift toward multi-disciplinary community healthcare hubs, designed to integrate multiple services and reduce patient reliance on acute hospital settings. As a result, councils, NHS commissioning groups, and private developers are increasingly prioritising new medical centre construction.

This strategic need is central to lender appetite in 2025. Medical centres are no longer viewed as simple commercial properties; instead, they are recognised as essential community infrastructure. From a lender’s perspective, this changes everything. Businesses operating from these centres benefit from stable demand, regulatory oversight, strong covenant structures, and long-term service alignment with national health priorities. This stability allows lenders to view medical centres as low-risk investment assets, even during periods of wider economic uncertainty.

Furthermore, as retail, office, and hospitality sectors fluctuate, specialist lenders are reallocating capital toward healthcare development. Medical centres provide predictable long-term occupancy potential, diversified tenant mixes, and high retention rates—far outperforming typical commercial developments. These characteristics underpin lender confidence and allow for more flexible, higher-leverage structures than would be possible in other sectors.

How Medical Centre Development Finance Works in 2025

Financing a new-build or expanded medical centre involves several moving parts. Development lenders assess construction cost, projected value on completion, operator strength, tenancy stability, and long-term demand within the local area. When the application is correctly structured, lenders are often prepared to fund land acquisition, build cost, professional fees, and specialist clinical fit-out.

One of the most important dynamics in 2025 is the increasing willingness of lenders to fund 100% of development costs in selected healthcare cases. This full-value lending is typically driven by the strength of NHS-related covenants—whether through long-term GP leases, pharmacy contracts, or multi-operator agreements with clinicians or private specialists. Where tenants commit to long-term occupancy prior to construction, lenders are particularly comfortable advancing full-value finance, as future rental income is effectively pre-secured.

Fit-out finance is another key component. Medical centres require significant investment in clinical-grade finishes, ventilation, flooring, medical rooms, disabled access facilities, pharmacy units, diagnostic areas, and compliance features. Many lenders in 2025 now include specialist fit-out costs within the development facility, recognising that these elements are essential to the centre’s long-term viability.

Lenders typically provide funds through staged drawdowns aligned with construction milestones. These stages reflect foundation works, structural progress, enclosure, internal completion, and final commissioning. While staged drawdowns have historically been viewed as time-consuming, healthcare properties benefit from predictable build programmes and strong project viability, reducing lender hesitation.

What Lenders Are Looking For

Lenders offering development finance for new medical centres in 2025 are focused on several core elements that define both risk and opportunity. One of the most significant considerations is covenant strength. GP surgeries with long-term NHS reimbursement arrangements, pharmacies with stable dispensing contracts, and private specialists offering high-value clinical services all contribute to a secure tenant base. Lenders see these tenancies as essential for long-term rental viability.

The second key consideration is local demand. Areas with growing populations, large new housing developments, limited existing primary care provision, or high patient-to-GP ratios receive elevated lender interest. Lenders closely analyse demographic data to understand whether a new medical centre is strategically positioned to meet long-term community needs.

Lenders also examine the developer or operator’s experience, particularly where private-sector-led medical centres are proposed. While first-time medical landlords can still qualify, lenders pay close attention to project management capability, contractor reliability, and planning progression. Borrowers with strong professional teams, detailed cost schedules, and well-structured business plans present significantly stronger cases.

Valuation methodology is also central to lender assessment. Medical centres are evaluated not only on construction cost and physical form but also on long-term income potential, service integration, and the reliability of tenant cashflow. This income-based valuation approach often allows lenders to justify higher leverage—even up to 100%—when the development is supported by long-term clinical service contracts.

Challenges Borrowers Face

Although lender appetite is strong, borrowers often face predictable challenges when financing new medical centres. One common challenge is underestimating the complexity of healthcare fit-out. Medical premises require specific ventilation, clinical flooring, lead-lined rooms (in the case of imaging), infection control features, and compliance systems. These costs must be properly modelled and presented within the funding application.

Another challenge comes from generalist lenders who treat healthcare developments like typical commercial builds. Many operators initially approach their mainstream bank, only to be declined due to perceived sector complexity. This is rarely a reflection of project viability; rather, it reflects a lack of specialist underwriting expertise. Specialist lenders, by contrast, understand healthcare risk profiles and are far more supportive.

Project timing can also create friction. Planning delays, NHS negotiations, tenancy agreements, and contractor sequencing must be carefully managed. Healthcare developments involve more stakeholders than traditional commercial sites, and lenders want reassurance that these elements are being coordinated effectively.

Additionally, borrowers sometimes overlook the importance of pre-letting. While not mandatory, securing heads of terms with GP practices, pharmacies, consultants, or NHS community services prior to construction significantly strengthens the lending case and often unlocks the highest leverage.

Smart Strategies and Solutions

Borrowers who achieve successful outcomes with medical centre finance typically follow a structured, strategic approach. They begin with clear demand analysis, demonstrating why the chosen location requires expanded or new community healthcare provision. This narrative is essential for lender confidence and should include demographic trends, existing service gaps, and planned local developments.

Another successful strategy involves securing early tenant interest. Even non-binding heads of terms with GP partners, pharmacies, consultants, or diagnostic providers materially strengthen the case. Lenders respond positively when future occupancy is supported by NHS-backed income or strong private clinical demand.

Borrowers also benefit from presenting comprehensive cost schedules that detail construction, contingency, compliance, fit-out, and specialist equipment. Lenders reviewing well-prepared financial structures with transparent cost management tend to offer more flexible and higher-leverage terms.

Healthcare operators who require short-term capital during early planning or land acquisition phases often supplement their facility with bridging finance. For operators exploring this approach, our article Unlocking Capital with Bridging Loans explains how short-term solutions can support phased or pre-planning strategies.

Hypothetical Example: How 100% Funding Works for New Medical Centres

A typical full-value funding scenario could involve a GP partnership seeking to develop a new multi-disciplinary medical centre in a growing community. The site requires £3.2 million in development and fit-out costs. The practice secures outline pre-letting interest from a long-established pharmacy, visiting consultants, and a diagnostic provider. A specialist healthcare lender evaluates the NHS reimbursement structure, demographic demand, and long-term operational viability.

Because tenant income is stable and construction costs are aligned with industry standards, the lender offers 100% funding for both the build and the clinical fit-out. The loan is structured through staged drawdowns with a long-term commercial mortgage replacing the development facility upon completion.

A similar outcome occurs with private-led developments. A private operator planning a modern outpatient clinic with imaging, minor procedures, and allied health services may secure 100% funding when they demonstrate strong demand, experienced clinical leadership, and robust revenue modelling.

Outlook for 2025 and Beyond

The shift toward community-based care will continue to accelerate through 2025 and beyond, with integrated medical centres at the heart of this transformation. As the NHS continues to enhance primary care infrastructure, and private healthcare grows across multiple specialties, medical centres will remain one of the most desirable asset classes for lenders.

Development finance is expected to remain flexible, competitive, and increasingly supportive of high-LTV lending. Borrowers who plan strategically, prepare comprehensive financial information, and engage specialist healthcare lenders early will secure the strongest outcomes.

How Willow Private Finance Can Help

Willow Private Finance specialises in structuring complex, high-LTV healthcare development finance for GP partnerships, pharmacies, private operators, and integrated clinical providers. Our expertise in NHS covenant structures, healthcare valuation, development sequencing, and clinical fit-out finance allows us to position applications in the strongest possible way for approval.

We work with every major specialist healthcare lender in the UK, including institutions that offer 100% finance for medically backed developments. Whether you are developing a new primary care centre, expanding an existing surgery, converting a commercial unit into a clinical hub, or creating a multi-disciplinary medical facility, we manage every aspect of the funding process from early modelling to lender negotiation.

Frequently Asked Questions

Q1: Can new medical centres really be financed at 100% in 2025?
Yes. Many specialist lenders now offer full-value lending when the project is supported by strong NHS-backed income or long-term clinical tenancies.

Q2: Does the development need to be pre-let to secure finance?
Not always, but early tenant interest—especially from GP practices or pharmacies—significantly strengthens the case.

Q3: Can fit-out and compliance costs be included in the loan?
Yes. Many lenders include clinical fit-out, equipment, and compliance upgrades within the development facility.

Q4: Will lenders fund conversions as well as new builds?
Yes. Both new builds and conversions qualify for high-LTV healthcare development finance when supported by strong demand and clinical viability.



Q5: Is experience required to develop a medical centre?
Experience helps, but first-time developers can still secure strong terms when supported by professional advisers and a comprehensive project structure.

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