The residual works. S106 is structured. The sponsor has track record.
You book the lender intro. The credit analyst opens the file and goes straight to one line:
What is the loan as a percentage of GDV?
That is LTGDV — loan-to-gross-development-value. It is the first ratio most development finance credit committees calculate, often before they read the sponsor profile.
This is post three in the broker series:
- Residual land value — qualify the site
- S106 for brokers — structure the obligations
- LTGDV — speak the lender's language on day one (this post)
If posts one and two are right, LTGDV is where the facility size is won or lost.
What LTGDV means (in one sentence)
LTGDV = total facility ÷ gross development value × 100
Example: £850,000 facility on £1,200,000 GDV = 70.8% LTGDV.
It tells the lender how much of the exit value is covered by debt. The higher the LTGDV, the less equity cushion remains if GDV slips, costs overrun, or sales slow.
Brokers do not need to memorise lender policy manuals. You need to know the ratio, what drives it, and what evidence makes it credible.
LTGDV vs LTC — do not mix them up
Credit committees look at both. Brokers routinely conflate them.
| Metric | Numerator | Denominator | What it measures | |--------|-----------|-------------|------------------| | LTGDV | Facility (or total debt) | GDV | Debt against exit value | | LTC | Facility | Total project cost | Debt against cost to deliver |
A scheme can show 65% LTC and 72% LTGDV on the same numbers — both correct, different questions.
- LTC answers: how much of the cost stack is debt-funded?
- LTGDV answers: how much of the exit is debt?
Lenders cap both. Breaching either cap kills the deal — even when the other looks fine.
When you present a case, show both ratios with the same facility size and the same cost stack. Inconsistency between LTC and LTGDV in a submission is an immediate red flag.
What lenders are actually testing
LTGDV is not a box-ticking exercise. The credit committee is stress-testing three risks:
1. GDV risk
If achieved sales prices come in 10% below appraisal, does the facility still repay from exit?
Higher LTGDV means less room for GDV shortfall before the lender is underwater.
2. Cost risk
If build cost runs 15% over, does the equity absorb it — or does the lender need to fund more?
Cost overruns do not change LTGDV directly (GDV is the denominator). They change whether the sponsor can complete and reach the GDV that justifies the ratio.
3. Time risk
Interest roll-up increases the facility during the build. The LTGDV at first draw is not the LTGDV at exit.
A 65% LTGDV at enquiry can become 68% at practical completion if the programme slips and interest capitalises.
Brokers who present LTGDV as a static snapshot without noting roll-up assumptions are presenting a number the credit committee will recalculate anyway.
Typical lender bands (indicative)
Every lender differs. These are market norms for UK residential development finance — useful for broker qualification, not a substitute for lender policy:
| Route | Typical LTGDV cap | Notes | |-------|-------------------|-------| | Senior development finance | 60–70% | Clean residential, experienced sponsor | | Stretch senior | up to ~75% | Strong track record, proven GDV evidence | | Mezzanine behind senior | N/A at senior level | Mezz sits behind; combined leverage matters | | Regulated / conservative lenders | 55–65% | Lower appetite, more equity required |
If your residual only works at 78% LTGDV on optimistic GDV, you are not placing senior debt — you are looking for equity, mezz, or a different deal structure.
Know that before you make the introduction.
What drives LTGDV up (and how brokers lose deals)
LTGDV rises when:
- Facility size increases — higher drawdown, more interest capitalised
- GDV falls — affordable housing quantum, weaker comps, over-stated £/sqft
- Costs were understated — S106/CIL missing from the stack (post two)
- Land price was wrong — residual looked fine because land was excluded (post one)
The most common broker mistake: presenting LTGDV against a GDV that assumes 100% open-market sales when S106 requires 30% affordable. The lender recalculates GDV downward. LTGDV jumps. The deal no longer fits.
Fix the GDV and cost stack first. LTGDV follows.
What to show the lender before they ask
You do not need a 40-page credit paper at enquiry stage. You need five items that let the credit analyst calculate LTGDV themselves and agree with your number.
1. GDV build-up
| Line | Source | |------|--------| | Unit count and NIA | Planning permission / sponsor | | £/sqft or £/unit | Comparable evidence — not aspirational asking prices | | Tenure split | S106 / planning consent | | Total GDV | Computed |
Separate open-market GDV from affordable. State what is evidenced vs sponsor-declared.
2. Cost stack (same basis as residual)
Build, professional fees, planning, S106, CIL, finance, contingency — line by line.
The LTGDV denominator (GDV) and the viability cost stack must use the same assumptions. If S106 is a round number in the viability and a structured annex in the appendix, the analyst will use the annex — and your LTGDV will not match theirs.
3. Facility size and structure
- Gross facility at exit (including capitalised interest if applicable)
- Drawdown profile (high level)
- Arrangement fee — inside or outside facility?
- Exit route — sales, refinance, part-sale part-refi
4. LTC and LTGDV on the same page
GDV: £1,200,000
Total cost: £1,050,000
Facility: £850,000
Equity: £200,000
LTC: 81.0% (£850k ÷ £1,050k)
LTGDV: 70.8% (£850k ÷ £1,200k)
Show the maths. Credit committees trust arithmetic they can verify.
5. Sensitivity (one line each)
- GDV −10%: LTGDV becomes X%, equity buffer £Y
- Build +10%: sponsor equity required £Z additional
- Programme +3 months: facility at exit £A, LTGDV B%
You do not need a full Monte Carlo. You need to show you have thought about what happens when the base case is wrong.
Worked example (broker shorthand)
| Line | Value | |------|-------| | GDV (6 units, open market) | £1,323,000 | | Total development cost | £1,479,600 | | Senior facility requested | £900,000 | | Sponsor equity | £579,600 | | LTC | 60.8% | | LTGDV | 68.0% |
At 68% LTGDV with a clean residential scheme and experienced sponsor, this sits inside typical senior appetite — subject to GDV evidence and S106 verification.
Change one input:
- Affordable quantum increases → GDV falls to £1,100,000 → LTGDV becomes 81.8% → outside senior range.
That is why posts one and two matter. LTGDV is the output. Residual and S106 are the inputs.
The broker checklist before you quote LTGDV to a lender
- [ ] GDV build-up with comp evidence — not sponsor aspiration alone
- [ ] Affordable housing impact on GDV reflected
- [ ] S106 and CIL in cost stack — structured, not lump sum
- [ ] Facility includes realistic interest roll-up assumption
- [ ] LTC and LTGDV shown together, same numbers
- [ ] Sensitivity on GDV −10% stated
- [ ] LTGDV calculated against the same GDV the lender will use
If LTGDV only works on the developer's best-case GDV, say so. Lenders will find out anyway.
How this fits the evidence pack
LTGDV does not live in isolation. It sits in the lender-ready evidence pack alongside:
- Viability summary — GDV, cost stack, profit margin
- S106 annex — obligation exposure with clause references
- Planning status — permission, conditions, appeal history
- Sponsor profile — track record, equity source
PlanSureAI assembles these into a structured pack so the credit committee can verify GDV, costs, and obligations before they sign off on the leverage ratio.
The broker's job is to qualify the site, structure the obligations, and present a facility size the lender can underwrite — not to argue for the highest possible LTGDV.
The best introductions arrive with LTGDV already calculated, evidenced, and stress-tested.
The series
- Residual land value — qualify the site in 10 minutes
- S106 for brokers — read the obligations before they kill the deal
- LTGDV for lenders — speak the credit committee's language on day one (this post)
Run the residual. Structure the S106. Present the LTGDV. That is the broker's development finance brief.