NHS Property Services creates £200million for the NHS from surplus property sales

The surplus former Moreton-in-the-Marsh hospital, sold by NHS Property Services for £1.545m

by Alex Cameron

Figures released in Parliament have confirmed that NHS Property Services has raised more than £203million from the disposal of 295 surplus NHS properties, generating valuable funds to be reinvested in the NHS estate.

The figures relate to the five years between 2013 when NHSPS was established and the end of financial year 2016/17.

Many of the sites were empty and all were no longer needed for clinical or any other use. However, they did require ongoing vital NHS funds for property related costs such as rates, security and basic maintenance.

Sales can only take place once the organisations and commissioners that plan and pay for local healthcare declare an empty property surplus to NHS requirements.

Year Number of properties Receipts
2013/14 46 £25m
2014/15 118 £57.7m
2015/16 59 £67.1
2016/17 72 £53.5
Total 295 203.3

The figures come after the National Audit Office published a report examining a sample of low and medium value disposals across a number of Government organisations. It showed that in all but one of the six NHS disposal cases they looked at, NHSPS had included ‘overage’ – a clause which allows the seller to receive money in addition to the original sale price subject to certain conditions. In one of the cases highlighted, NHSPS succeeded in selling the property for 343% more than the original valuation*.

The former Bridgwater Hospital in Somerset was sold for £1.6m to a hotel business after the opening of a new £33m hospital nearby.

Kieran Kinsella, Head of Investment Management at NHS Property Services, said: “Our clear goal is always to generate maximum value from the sale of surplus NHS land, so we can reinvest in the NHS estate.

“By selling on land that the NHS no longer needs, we can help increase efficiency and reduce the operational costs of the estate we manage.”

Our disposal programme has facilitated the development of 3,749 housing units with 2,748 currently under construction. Releasing land for new homes is part of the overall Government strategy to help provide much-needed UK housing supply.

NHS Property Services manages approximately ten percent of the total NHS estate and provides strategic advice to other NHS organisations to help them efficiently manage the local NHS property portfolio. This helps NHS organisations make best use of available space and meets local commissioning needs more effectively. In the first instance, any surplus property is registered on the Government’s register of surplus land allowing other public bodies express an interest in the site, before a sale on the open market.

The 295 completed transactions include mix of unused clinics, health centres and non-clinical buildings and land such as:

  • The former Ridge Hill hospital site in Wordsley, West Midlands – sold in March 2017 for £3.35million. After a feasibility exercise, NHS Property Services obtained outline planning permission for up to 129 residential dwellings, with 21% affordable housing units. Overage and clawback provisions ensures the NHS benefits from future value creation.
  • A vacant health clinic in Brixton sold in September 2016. NHS Property Services carried out extensive planning work prior to marketing, resulting in an outline planning consent for 5 town houses. The property achieved a sale price of £2.426million.
  • The former Moreton-in-the-Marsh Hospital, Gloucestershire – this surplus and empty property (see photo above) was sold to specialist retirement developers Blue Cedar Retirement Homes in January 2017 in an unconditional sale for £1.545million. The hospital closed to patients in 2009 after the opening of the new £11million North Cotswolds Hospital. While it was empty, the hospital, in the heart of the Cotswolds, led a glamorous secret life for three summers as one of the main locations for the filming of hit BBC1 TV series Father Brown.

For more on property disposals, click here.