Tools · Development
Development appraisal calculator
A quick appraisal to see the profit and leverage of a scheme the way a development lender will — before you send it anywhere.
Appraisal summary
- Profit
- £669,000
- Profit on cost
- 16.2%
- Profit on GDV
- 13.9%
- Loan-to-costLoan ÷ costs before sales and finance
- 78.1%
- Loan-to-GDV
- 60.4%
- Total costs
- £4,131,000
- Equity requiredCosts before sales and finance, less loan
- £815,000
Cost breakdown
- Contingency
- £120,000
- Professional fees
- £240,000
- Sales & marketing
- £96,000
- Costs used for loan-to-cost
- £3,715,000
A simplified illustration. Lenders define loan-to-cost and profit slightly differently, and will rely on their own valuation and quantity surveyor. Indicative, subject to lender approval.
The measures lenders use
Profit on cost
Profit divided by total costs. It shows how much margin there is to absorb cost overruns or a softer sales market. Lenders set their own minimums, which vary with scheme size, type and leverage.
Loan-to-cost (LTC)
The loan as a share of the costs needed to deliver the scheme — typically land, acquisition costs, build, contingency and professional fees. The remainder is your equity.
Loan-to-GDV (LTGDV)
The loan as a share of the completed value. Lenders cap both LTC and LTGDV; whichever produces the lower loan usually sets the facility. Where the gap to your available equity is too wide, stretched senior, mezzanine or a joint venture partner can close it.