30 Jun 2021  •  Covid-19  •  3min read By  • Nigel Jones

How the pandemic impacted the dental practice market

Practice Plan’s Nigel Jones caught up with Tom Coates, FTA Law’s Managing Director,  to discuss how the pandemic has impacted the dental practice market…

NJ: Hi Tom, we’re going to go right back to March 2020 when the pandemic hit, and we were all locked down for the first time. When that happened, what was the impact on the dental market?

TC: Like almost everything in society, the practice market virtually came to a standstill, and that was understandable given the situation everyone was in. Practices had completely closed down and no one was really in a position to push ahead with buying or selling a practice, because they weren’t allowed to open the doors.

Before the pandemic, we had around 50 to 60 properties going through a sale, but they were put on hold, like most of the world was, and we just had to monitor the situation and wait for things to pick up again.

NJ: Have you seen any impact on practice values over the past year?

TC: In the dental world there hasn’t really been much of a change, despite the economic impact of the pandemic. The practices we’ve dealt with in recent months have been valued at what they were pre-Covid, so, like I say, things have remained quite stable.

And to back that up, during a high court case earlier this year, it was revealed that the pandemic had caused a very minimal impact on practice values despite the upheaval of the last 12 months.

NJ: Did you see people pulling out of the market because of the uncertainty caused by the pandemic, or was there a rise in sales?

TC: As you can imagine, Covid has been the final nail in the coffin for some dentists. Some came to a point where they’d just had enough of the business and wanted to get out and sell up.

Then on the other side, a lot of associates have looked at the situation and realised the best way to safeguard their futures is to become a practice owner. Even though some owners have left the market, they have been replaced by associates, so at the moment the market is very buoyant.

NJ: Have there been any difficulties in dealing with sales and purchases over the last few months, and if so, what have they been?

TC: Things have slowly started getting back to normal but there were a few difficulties when we started operating again, and the main one was time delays.

Earlier this year the NHS were not responding unless it was really urgent, and the Care Quality Commission (CQC) response times were up to 16 weeks, so that was really hampering deals and delaying the process.

As we all know, so many organisations have been playing catch-up with staff numbers down and people working from home, and that wasn’t ideal for anyone who wanted to buy or sell.

The delays weren’t just having an impact on the buyer and the seller, it was on the banks, brokers and agents as well, as they only get paid on the completion of a deal.

However, we’ve recently heard that CQC inspections are back up and running again, and we hope that will lead to a reduction in response times.

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