The UK Pharmacy Finance Landscape 2026 (Commercial Mortgages)
We are seeing an entrepreneurial spirit within our pharmacy client base. The rising prominence of Pharmacy First and the widening of service provision and diversification come at a critical time, when pharmacies continue to face significant financial pressures due to factors including increasing operating costs, volatility in medicine costs, and ongoing NHS funding.
While the challenges remain material, the sector’s proactive response through innovation, service expansion, and improved operational efficiency has helped to mitigate risk and improve resilience.
During the past year, the market saw some signs of concern amongst lenders, particularly following several widely publicised group administration processes.
This led to banks questioning whether the traditionally stable pharmacy sector might be showing signs of vulnerability. The funding settlement announced in May provided a measure of necessary reassurance, which has encouraged banks to remain supportive of the sector. However, the importance of robust business planning, identifying risks and opportunities, strengthening administrative frameworks, driving cost efficiencies, and maximising all available revenue streams is as important now as ever. This comprehensive approach continues to play a critical role in our lender engagement and gaining successful outcomes on our clients’ funding applications.
Competition among lenders has intensified for borrowers evidencing key demonstrable skills, and this has led to a beneficial impact on borrowing conditions.
Our interest rate spread analysis shows a further continuance of falling loan interest margins, with average interest margin now 2.2% compared to 2.58% last year and 2.7% in 2023/24 (above Bank Base rate, or an appropriate Fixed Rate Cost of Funds).
With borrowing becoming more affordable, this has helped the first-time buyer market remain highly active, with 55% of our pharmacy customers being first-time buyers. That said, the percentage of first-time buyers has fallen from 62% in 2025, mainly due to a notable increase in refinancing activity with existing owners taking advantage of market conditions by reviewing their banking arrangements and securing more favourable terms.
Looking ahead, the 2026 funding settlement represents a timely and much needed boost for community pharmacy; however, it does not remove the fundamental challenges facing the sector. Pharmacies that succeed and attract the strongest funding offerings in this evolving landscape will be those that:
- Embrace patient-centric care models
- Invest in workforce development and prescribing capabilities
- Leverage technology to improve efficiency
- Maintain strong financial discipline and operational resilience
Lenders recognise the sector as being defined by both opportunity and pressure, and therefore adaptability will remain the key determinant of long-term success.
Read the full market review here: Pharmacy Market Review 2026 | Christie & Co