The price of pharmacy businesses is falling and could have dropped by as much as 10 per cent since last year, industry experts have warned.

Legal experts said buyers of pharmacy properties were becoming "more discerning", while pharmacy accountant Umesh Modi said he had seen sale prices slide by between 5 and 10 per cent over the past 12 months.

But experts stressed that it was still a "sellers' market" and said robust pharmacy businesses remained desirable in the tough economic climate. The comments came after the issue split readers on a C+D website poll, with 38 per cent saying it was the wrong time to sell and a quarter saying prices were good.

"Buyers are becoming more discerning, so pharmacies are taking longer to sell" Anne Hutchings, Hutchings Consultants

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Contractors wishing to sell would have to prove their businesses were profitable despite the challenging conditions, said pharmacy brokers and valuers Hutchings Consultants managing director Anne Hutchings. "I would say prices are marginally down and buyers are becoming more discerning, so pharmacies are taking longer to sell," she told C+D. "I think generally because of the category M announcements, buyers are looking for certain types of businesses that they believe will remain profitable in the future."

But Umesh Modi, partner at accountancy firm Silver Levene, advised contractors not to sell unless they were "desperate". "Prices are definitely going down – I would say they are somewhere in the region of 5 to 10 per cent lower than last year," he explained. "There's so much bad news in the marketplace that it's probably not the right time to sell, because prices are going to be depressed."

However, Mr Modi stressed that pharmacies could still "hold their own" better than other retail businesses in difficult economic conditions and said he was sure prices would rise again.

The comments were echoed by healthcare lawyer David Reissner, partner at law firm Charles Russell, who said he was starting to see more optimism in the market. "Prices may have dropped a bit, probably because of category M and the squeeze on remuneration, but they are still broadly stable," he told C+D.

Mr Reissner added that new control of entry proposals, which could see PCTs block many pharmacy applications, could work to the advantage of sellers. "Demand is outstripping supply and if new market entry regulations make it more difficult to get new contracts, that will strengthen goodwill values further," he said.