How to Run GDV and LTV Numbers Like You’re Having a Pint — Not Sitting in a Lecture Hall

Master GDV and LTV Calculations: What You'll Achieve in 30 Days
In the next 30 days you’ll be able to:
Calculate a defensible GDV (gross development value) from comparables and basic build-ups. Work out the realistic LTV/lender offer you can get, and how that translates into cash available on day one. Build a simple stress-tested model that exposes whether a small project is worth doing. Adjust for Scottish legal and tax differences that push up transaction costs and change minimum deal economics. Decide whether to pitch a project to a high-LTV lender, take a partner, or walk away. Before You Start: Required Documents and Tools for GDV and LTV Work
Get these in a folder before you touch the numbers. If you don’t have them, you’re guessing — and guessing loses money.
Site details: title plan, site area, existing use, access notes, any planning constraints. Comparable sales: recent sold prices of similar units in the same area (not asking prices). Detailed cost estimate: contractor quote or element-based estimate (groundworks, structure, finishes, externals). Professional fees schedule: architect, engineer, planning consultant, surveyor. Estimated holding costs: interest, insurance, utilities, site security for the build period. LBTT and other Scottish-specific fees: legal fees, registration costs, and any planned abnormal costs. Spreadsheet (Excel or Google Sheets) and a calculator. Don’t rely on memory or a single dusty printout. Your Complete Development Valuation Roadmap: 7 Steps from Appraisal to Lender Submission
Follow these seven steps in order. Skip none. Each feeds the next.
Step 1 — Set a believable GDV
Work from sold prices, not agent hype. Pull the last six months of transactions for comparable dwellings. Adjust for finish, size and location. If comparables are thin, use price per sq m and be conservative. Example: four terraced houses selling at an average of £200,000 each gives a GDV of £800,000.
Step 2 — Build the cost stack
Break costs into land, construction, fees, contingencies, and finance. Use a table to keep it clean. Typical contingency for small projects is 5-10% of build cost; use 10% if you’re not confident.
Step 3 — Decide which lender metric matters
Lenders quote against GDV (loan to GDV) and against cost (loan to cost or LTC). Many high-street development lenders use loan-to-GDV ceilings. Example: a lender offers 65% of GDV or 70% LTC up to a maximum loan level. You must calculate both and take the lower actual loan amount.
Step 4 — Calculate the loan amount and finance cost
Loan = min(GDV * LTV%, Total Development Cost * LTC%). Then add interest (monthly or rolled up), arrangement fees, exit fees and sales fees (estate agent typically 1.5-2.5% in Scotland). Build these into your cashflow so you know the cash drawdown schedule and total finance cost.
Step 5 — Work out your profit and margin
Profit = GDV - (Total Cost + Total Finance Cost + Sales Fees + Taxary costs). Express as both absolute cash and percentage margin on cost and on GDV. Lenders look at margin on cost; investors want profit after all costs.
Step 6 — Stress test
Run downside cases: -10% GDV, +10% build cost, 2 months extra build time. If your margin drops below your required threshold (I use 15% net for small projects), the deal is marginal or dead.
Step 7 — Prepare the lender pack
Include comparables, cost breakdown, cashflow, and a clear explanation of the exit. Lenders hate ambiguity. Be short, factual and show your numbers. If you're in Scotland, flag LBTT and standard security registration timing up front.
Item Example Amount GDV (4 houses @ £200,000) £800,000 Land purchase £150,000 Build cost £450,000 Professional fees & contingencies £70,000 Estimated finance & sales costs £60,000 Total development cost £730,000 Lender offers 65% GDV £520,000 (max) LTC 70% of cost £511,000 Actual loan (lower) £511,000 Developer equity required £219,000 Projected profit (GDV - all costs) £70,000 (8.75% on GDV) Avoid These 7 Valuation Mistakes That Kill Small Project Deals
Small projects die from the same avoidable errors. If you want blunt, here they are.
Using asking prices as GDV. Agents inflate things. Use sold prices and adjust conservatively. Ignoring LBTT and legal timing in Scotland. That cost hits your early cashflow and can make small sites unworkable. Underestimating abnormal costs (contaminated land, access works). Add a specific line in your budget for abnormals. Assuming full lender appetite. Many lenders have minimum loan amounts or refuse small schemes; check before you spend on reports. Counting on 100% of unit sales at list price. Always model worst-case sale at -10 to -15%. Skipping a realistic contingency. Don’t be proud of a 2% contingency; that’s a fast track to a loss. Misreading titles in Scotland. Standard security and servitudes can change exit options; get a Scottish solicitor early. Pro Underwriting Strategies: Advanced GDV and LTV Tactics Brokers Use
If you want to be useful to a lender and get better terms, think like the person who signs the papers.
Push on GDV credibility, not optimism
Don’t inflate finishes to boost GDV. Back your GDV with two comparables per unit, showing sold date, price and net adjustments. Lenders reward defensible GDV with tighter covenant checks.
Split funding by risk tranche
For tight deals get a senior lender for core build and a small mezzanine or sponsor equity for fit-out or finishing. Mezzanine costs more but reduces senior exposure and may lift loan size overall.
Use phased drawdown to limit interest
Draw only what's needed for the next build phase. It reduces interest and shows discipline. Lenders like staged draws with snag/agency inspections.
Negotiate sales-agency arrangements
Agree fixed agency fees where possible. Estate agent fees slice into your margin. If the site is local and bulk-sold to an RN - no, sorry - to a housing association or local developer, you can often get a smoother exit.
Scottish legal tactics
In Scotland, you can speed the exit by ensuring the standard security is lodged promptly and by pre-clearing any servitude issues. Tell the lender you’ve done it. It shortens approval time and can sway pricing.
Contrarian view — Take less debt, get a better margin
Everyone chases maximum LTV. That’s not always smart. A lower loan and more equity can give you leverage elsewhere: lower interest, fewer covenants, faster approvals. For small projects the cost of chasing more loan can wipe margin. If the extra loan increases finance fees and sales risk, walk away or bring in a partner instead.
When Calculations Go Wrong: Fixing Common GDV and LTV Errors
If your numbers fail reality, you need a fast triage plan. Here’s what to do, step by step.
Re-run GDV as three scenarios
Create conservative, base and optimistic GDVs. Knock 10% off the base as your conservative. If the conservative case fails your minimum margin, stop or change the model.
Slice costs to individual units
If a single unit is killing your margin, you may split-phase the build or change the unit mix. Sometimes dropping an expensive unit or turning it into a simpler finish is enough to restore margin.
Renegotiate the land price or payment terms
Push for staggered land payments or a deferred element tied to sales. Many sellers prefer some cash now and more later. That saves equity and fixes early cash strain, especially in Scotland where LBTT timing can be rigid.
Get a conditional pre-agreement with a lender
A cash-in-principle letter that sets a max loan based on your GDV and cost gives you negotiation power. It’s often quicker than reworking the whole app later.
Re-check title and planning with a local adviser
Scotland’s title and planning quirks can derail exits. A short solicitor or planning consultant review often finds a simple fix. Spend the £1,000 now, save £10,000 later.
build cost funding https://www.propertyinvestortoday.co.uk/article/2025/08/6-best-development-finance-brokers-in-2025/ Quick Win — A Two-Minute Sensitivity Test
Open your spreadsheet and do this now:
Cell A1 = your GDV. Cell A2 = total development cost. Cell A3 = loan as % of GDV (e.g., 0.65). Cell B1 = A1 * 0.90 (10% GDV fall). Cell B2 = A2 * 1.10 (10% cost rise). Cell C1 = min(B1 * A3, B2 * 0.70) (use your lender LTC estimate). Cell C2 = B1 - B2 - C1 (new worst-case profit).
If Cell C2 is negative, you’ve got a problem. Either increase contingency, reduce land cost, or walk. That test separates the plausible deals from the pipe dreams.
Final Straight-Talking Advice
Small projects in Scotland are brutal on thin margins. LBTT, legal timing, and minimum lender sizes all conspire to make small schemes less forgiving than they are in parts of England. Don’t rely on one optimistic spreadsheet. Use comparables, force yourself to present a conservative case first, and be ready with alternatives: mezzanine, partner equity, or a different exit.

And a last thing: brokers and valuers are human and tied to incentives. Cross-check their numbers. If someone promises a 75% LTV on GDV for a tiny risky site, be suspicious. Get it in writing, then stress test it.

Do this work properly and you’ll spot money-losing deals before you sign. Do it sloppily and you’ll be nursing a loss on a Friday night wondering where it all went wrong. Pick your night out.