Calculating GDV for residential
For houses and flats, GDV is the sum of the expected sale prices of each unit. An illustrative scheme of four houses at £425,000 and six flats at £260,000 has a GDV of £1,700,000 + £1,560,000 = £3,260,000.
Values are usually built from comparable sales, adjusted for size, specification, parking and outlook, and often checked on a price per square foot or square metre basis. New-build homes may sell at a premium to second-hand stock, but valuers will want evidence for it.
Commercial and mixed-use
For commercial units, GDV is usually the rent divided by an investment yield, after purchaser's costs. A shop let at £30,000 a year at a 7% yield is worth roughly £428,000 before costs. Unlet units are valued on an assumed rent and letting period, often more cautiously. Mixed-use schemes add the residential and commercial values together.
The evidence lenders expect
- Recent comparable sales of similar new-build or converted units nearby
- Asking prices and agents' opinions, which valuers weigh less than completed sales
- Schedules of accommodation with unit sizes
- For commercial space, comparable lettings and investment sales
- Any reservations or pre-lets already agreed
The lender's valuer forms their own view. Optimistic GDVs are one of the most common reasons a facility comes back smaller than expected.
How GDV sets your facility
Senior development lenders commonly lend up to about 60% to 70% of GDV, including interest and fees. On the £3,260,000 example, 65% LTGDV allows up to £2,119,000. Loan to cost limits apply alongside, and the lower figure wins. See LTV and LTGDV explained.
GDV also drives profit, which lenders test. Our guide on writing a development appraisal shows how GDV, costs and profit fit together.
Getting GDV right
Use realistic, evidenced values rather than the best achievable price. Test the scheme at a lower GDV, as a valuer or a softer market may bring it down. Speak to local agents early about specification and unit mix. A sensible GDV that holds up to the valuer keeps the facility, and your equity, where you planned.
To see indicative development terms based on your GDV, use Instant Quotes.
GDV for conversions and refurbishments
GDV is not only for new builds. On a conversion, such as offices to flats or a house to apartments, GDV is the value of the finished units. On a heavy refurbishment, it is the value of the property once the works are done. Lenders that size refurbishment facilities against value after works use the same evidence-led approach.
Converted units can be harder to value than new builds, because they may differ from local stock in layout, outlook or parking. Comparables from similar conversions are the best evidence. Where units are smaller than typical, valuers will check that they meet the relevant space standards and that buyers' mortgage lenders will accept them.
Common GDV mistakes
- Using asking prices rather than completed sales
- Applying a new-build premium without evidence
- Using price per square foot from larger or better-located homes
- Valuing every unit at the top of the range, rather than reflecting floor level, outlook and parking
- Ignoring how many similar units are being marketed nearby
A cautious, evidenced GDV is more valuable than an ambitious one that the lender's valuer will not support.
Common questions
What does GDV stand for?
Gross development value: the total market value of a scheme once complete.
How do lenders check GDV?
An independent valuer reviews comparable sales or lettings and forms their own view, which the lender relies on.
What is the difference between GDV and profit?
GDV is the total end value. Profit is GDV minus all costs, including land, build, fees and finance.
This guide is for general information only and should not be treated as legal, tax or financial advice. Lender requirements depend on the property and your circumstances.
