A 75% LTV development finance facility on a £1M GDV project could provide up to £750

A 75% LTV development finance facility on a £1M GDV project could provide up to £750,000 in debt, structured in drawdown tranches aligned to construction milestones.

Gross Development Value (GDV) is the cornerstone metric in property development; it represents the estimated open market value of the project once all construction is complete. Specialist development finance is uniquely underwritten against this future value, not the current derelict value of the site. A lender offering 65% or 75% Loan to GDV (LTGDV) is willing to lend up to that percentage of the final anticipated worth.

For a project with a £1M GDV, a 75% LTGDV facility means the total loan pot is £750,000. However, this is not handed to the developer on day one. The lender will initially advance funds to assist with the land purchase (e.g., 60% of current site value). The remainder of the £750,000 facility is held back and released in arrears as construction progresses, verified by a Quantity Surveyor. This protects the lender's exposure while ensuring the developer has the necessary capital to reach practical completion.