Glossary
GDV: Gross development value
What a property or development will be worth once the works are finished.
What it means
Gross development value is the expected value of a project when it is complete, whether that is one refurbished house or a block of new flats. Lenders size development and refurbishment loans against it, and it drives the profit on a flip or the refinance on a BRR. It should be backed by comparable sales of finished properties, not by hope.
Worked example
ExampleA building converted into three flats, each expected to sell for £140,000.
- GDV
- 3 × £140,000 = £420,000
- Loan at 65% of GDV
- £273,000 maximum
If the flats are only worth £125,000 each, GDV falls by £45,000 and so does the loan.
Information, not advice. Example figures are fictional and for illustration only.