What Is Loan to GDV (LTGDV) in UK Development Finance?

Ask a development finance lender how much they'll lend, and unlike a standard mortgage, you won't get a single percentage measured against one number. You'll get two, measured against two entirely different things. One of those is Loan to GDV (LTGDV), and understanding what it actually means is one of the more useful things a developer can grasp early, since it quietly shapes how much finance is realistically available.

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What does Loan to GDV (LTGDV) actually mean?

Loan to GDV (LTGDV) measures the loan amount as a percentage of the Gross Development Value, the projected value of the completed development once construction is finished. Rather than lending against what the site or building is worth today, the lender is partly lending against what it will be worth once the project is done.

So if a finished scheme is expected to be worth £2 million once complete, and a lender is comfortable with a 60% Loan to GDV, the maximum loan based on that measure would be £1.2 million.

Why does development finance use two different measures?

Development finance typically looks at both:

- Loan to Cost (LTC), the loan as a percentage of the total cost of the project, land plusbuild costs

- Loan to GDV (LTGDV), the loan as a percentage of the projected finished value

These two figures rarely align neatly, and lenders generally apply whichever one produces the more conservative, lower loan amount for that specific deal. That's why development finance calculations look more involved than a standard mortgage LTV, the lender is checking the numbers work from two different angles before settling on a final figure.

What's a typical Loan to GDV limit?

For most UK development finance, expect Loan to GDV limits somewhere around 55-65%. Some lenders will stretch higher for particularly strong schemes with experienced developers and secure planning permission, others will cap lower for higher-risk projects, first-time developers, or less predictable markets.

Why do lenders care so much about the finished value, rather than just the cost?

Because the finished value is what actually protects the lender if things go wrong partway through. If a development stalls, or costs overrun significantly, the lender needs confidence that the completed asset, once finished or even partially finished, would still be worth enough to recover their lending. Loan to GDV is effectively a safety margin built around the end result, not just the money going in along the way.

What affects where your Loan to GDV limit lands?

A number of factors move the figure up or down:

- Developer experience. An experienced developer with a track record of delivering similar schemes is generally viewed as lower risk than a first-time developer.

- Planning status. Full planning permission already in place reduces uncertainty considerably compared with outline permission or an ongoing application.

- Market and location. A well-established market with predictable demand supports more confident valuations than an untested or declining area.

- The realism of the projected GDV itself. An independently assessed, conservative valuation is viewed more favourably than an optimistic self-estimate.

- Exit strategy. A credible plan for selling or refinancing the finished units strengthensthe overall picture.

How is the Gross Development Value actually calculated?

Typically by an independent valuer or surveyor, who assesses what the completed units, houses, flats, commercial space, are realistically likely to sell or let for once finished, based on comparable properties, local market conditions, and the specification of the build. This isn't something a developer simply estimates themselves, lenders will want an independent, professional valuation behind the figure.

Does a lower Loan to GDV mean a better rate?

Generally, yes. A lower Loan to GDV means more of the project is being funded by the developer's own equity or deposit, which reduces the lender's risk and often translates into more competitive pricing. Stretching to the maximum Loan to GDV a lender will offer typically comes at a cost, both in terms of rate and in terms of how closely the project will be monitored throughout the build.

What happens if the projected GDV turns out to be wrong?

This is exactly why lenders lean on independent valuations rather than developer estimates. If market conditions shift during the build, and the finished value ends up lower than originally projected, it can affect the developer's exit strategy, and in some cases the lender's confidence in future drawdowns. Building a realistic, evidence-based GDV from the outset, rather than an optimistic one, reduces this risk considerably.

The mistake developers often make

Some developers focus heavily on Loan to Cost, since it feels more concrete, the actual pounds being spent, and pay less attention to how Loan to GDV might independently cap their borrowing. Understanding both figures from the outset, rather than being surprised when the lender applies whichever is lower, avoids a lot of frustration partway through planning a scheme.

The bottom line

Loan to GDV (LTGDV) measures a development finance loan against the projected value of the finished project, not just its cost, and typically sits somewhere around 55-65% for most UK schemes. Alongside Loan to Cost, it forms one half of how lenders decide what they're actually willing to fund.

Get a realistic, independently assessed GDV early, understand which measure is likely to cap your borrowing, and the whole development finance conversation becomes considerably more predictable than treating it as one single number.

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