Gross development value (GDV)
Gross development value (GDV) is the estimated open-market value of a property project once all the work is finished: the combined sale price of every completed unit, or the capitalised value of its rent if the scheme will be let. The government's planning practice guidance on viability describes it as an assessment of the value of development, and it is the figure a valuer, a lender and a buyer of the site all start from.
What GDV stands for and what it measures
GDV stands for gross development value. It is "gross" because nothing has been deducted yet: build costs, professional fees, finance, stamp duty and the developer's profit all come off it later. It is "development" value because it prices the finished scheme, not the property as it stands today. A tired house bought for £250,000 that will become two flats selling at £185,000 each has a GDV of £370,000, whatever it would fetch in its current state.
Landlords meet GDV whenever a project changes what a property is: splitting a house into flats, adding a storey, converting a commercial unit to residential, or turning a family house into a multi-let. A straightforward purchase of a finished buy-to-let has no GDV in any useful sense, because there is no gap between what you buy and what you end up owning.
How to calculate GDV
There are two methods, and the scheme's exit decides which one applies.
Units to be sold. Multiply each unit's floor area by a price per square foot taken from recent sales of comparable finished property nearby, then add the units together. Two 650 sq ft flats at £285 per sq ft give roughly £185,000 each and a GDV of £370,000.
Units to be let. Divide the scheme's expected net annual rent by the market yield for that type of property. A six-bed HMO producing £36,000 a year in net rent, valued at a 7% yield, has a GDV of about £514,000. Many buy-to-let lenders value smaller HMOs on a bricks-and-mortar basis instead, meaning what the building would sell for as a house, so check which basis your lender will use before relying on the higher figure.
A mixed scheme, such as flats over a shop, adds the two together. In our experience supporting landlords through conversions and HMO projects, the comparables are where appraisals most often go wrong: a converted period flat and a new-build flat on the same street rarely sell for the same price per square foot, and using the wrong one inflates the GDV before a brick is laid.
The GDV formula and a worked example
GDV sits at the top of a residual appraisal, which works in one of two directions:
Profit = GDV − (purchase price + build costs + fees + finance)
Maximum purchase price = GDV − (build costs + fees + finance + required profit)
Profit is usually expressed as a percentage of GDV. For plan-making, the viability guidance treats 15% to 20% of GDV as a suitable return to developers, and lenders and investors use a similar range as a benchmark.
House into two flats | Figure |
|---|---|
Purchase price | £250,000 |
Build costs and contingency | £60,000 |
Fees, finance and sales costs | £30,000 |
Total cost | £340,000 |
GDV (2 × £185,000) | £370,000 |
Profit | £30,000 (8.1% of GDV) |
At 8.1%, the scheme does not work as a sale. To earn 20% of GDV (£74,000), the purchase price would need to be no more than £206,000. It may still work as a hold, refinanced and let, because then the refinance valuation and the rent matter more than the sale margin. Run the finished scheme through the buy-to-let investment calculator to test it that way.
GDV versus market value
Market value is what a property is worth today, in its current condition and with its current permissions. GDV is a forecast of what it will be worth once the planned works are complete, valued on the assumption that planning consent is in place and the works are done. The two can be far apart: the gap between them, less the cost of closing it, is the profit in the project.
GDV is also close to the after-refurbishment value used in the BRRRR method. The difference is mainly one of scale. "After-refurbishment value" describes a single improved property; GDV is the term lenders and valuers use once a project involves new units, a change of use or structural work.
How lenders use GDV
Development lenders size their loans against GDV. Development finance is commonly capped at 60% to 65% of GDV, a measure known as loan to GDV (LTGDV), and at 85% to 90% of total costs, whichever is lower. In the flat conversion above, 60% of GDV caps the facility at £222,000.
The GDV that counts is the one the lender's own RICS valuer produces, not the figure in the borrower's appraisal. From working with landlords across the UK who have taken on conversions, the valuer's GDV is the number most likely to move against the plan, so it is worth agreeing the comparables with your broker before you commit to the purchase. Our guide to the best bridging loan lenders for landlords compares the lenders that fund refurbishment and development, and converting a property to an HMO covers the project most landlords meet GDV through first.
Is GDV defined in law?
No. GDV is a valuation concept, not a statutory term. In England, the government's planning practice guidance on viability sets out how it should be assessed when councils test whether development can afford affordable housing and other planning obligations. Valuers assess it under the RICS guidance note Valuation of development property, in force since 1 February 2020, which describes GDV as the aggregate market value of the proposed development.
Frequently asked questions
What does GDV mean in property?
GDV means gross development value: the total value of a property project once it is finished, before any costs are deducted. For homes that will be sold it is the sum of their sale prices; for property that will be let it is the rent capitalised at a market yield.
How do you work out GDV quickly?
For a sale, multiply the floor area of each finished unit by the local price per square foot for comparable property and add the results together. For a let, divide the expected net annual rent by the market yield. Treat either figure as an estimate until a RICS valuer has confirmed it.
What is a good profit on GDV?
Developers and lenders generally look for 15% to 20% of GDV, the same range the government's viability guidance uses for plan-making. A margin well below 15% leaves little room for cost overruns or a lower valuation; one well above 30% usually means the GDV is optimistic or the costs are understated.
Last reviewed: October 2026.
