Development Finance: What Lenders Actually Look For

19 Sep 2026 · 5 min read

GDV, build costs, experience, exit strategy — we walk through how development lenders assess a project and what makes a strong application.

GDV: the lender's starting point

Gross Development Value is what the completed development will be worth — either as aggregate sale value or as an investment asset. Development lenders typically lend up to 65–70% of GDV, though this varies by lender and project type. The first question any lender will ask is: what's the GDV, and how have you arrived at it? An independent RICS valuation is essential and should reflect local comparable sales, not optimistic projections.

Build costs and the schedule of works

Lenders want to see a detailed schedule of works and a costings document prepared by a quantity surveyor or experienced contractor. Vague build cost estimates are a red flag. The contingency you've allowed — typically 10–15% — also signals how experienced you are. Funds are drawn down in stages against surveyor sign-off on completed works; you won't receive the full facility upfront. Lenders who see tight costings with no contingency are immediately cautious.

Your experience matters more than you think

A first-time developer will face more scrutiny, lower LTVs, and a narrower range of willing lenders than someone with a track record of completed schemes. That said, first-time developers are not excluded. A simple two-unit conversion with clean title, planning permission granted, and a strong professional team — architect, QS, solicitor — can still attract sensible terms. We've placed first-time developers with credible lenders; it requires the right presentation and the right project.

Exit strategy: sale or refinance?

Every development lender will ask how you intend to repay the facility. If you're selling units, you need a realistic view of absorption rate and pricing. If you're refinancing to a buy-to-let or investment mortgage, that finance needs to be achievable based on completed rental income. We stress-test exit strategies before submitting any application, because lenders do — and an unrealistic exit is a reason to decline.

Have questions about your situation? Our team offers a free, no-obligation consultation — no upfront fees, just straightforward advice.

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