Broker Insightdevelopment financeLTGDVappraisal
LTGDV vs LTV: Why Development Finance Uses Different Metrics
Standard mortgages measure LTV against current value. Development finance measures LTGDV — Loan to Gross Development Value — against the finished value. Understanding this distinction is critical to structuring a viable development deal.
A lender offering 65% LTGDV on a scheme with a £1M GDV will lend up to £650,000 total across acquisition and build. If you pay £350,000 for the site and need £400,000 of build costs, the facility works. But if the site cost £500,000, the same lender will only fund £150,000 of build — creating a funding gap. Every development appraisal must be modelled against LTGDV before offers are made on land.