> ## Content Index > Fetch the complete content index at: https://webtenants.co.uk/llms.txt > Use this file to discover other available public pages before exploring further. # Development Finance Explained: GDV, Drawdowns and Exits - URL: https://webtenants.co.uk/learning/development-finance-explained/ - Published: 2026-04-28T00:00:00.000Z - Updated: 2026-09-14T13:12:07.531Z - Description: How property development finance works, including gross development value, staged drawdowns, monitoring surveyors and exit strategies. - Author: Amelia - Tags: learning, development finance, property development Development finance is the engine behind ground-up builds, conversions and heavy refurbishments, yet it is widely misunderstood even by experienced landlords. The confusion is understandable: money arrives in stages rather than upfront, lending decisions rest on a valuation of something that does not exist yet, and the whole structure revolves around jargon like GDV and LTGDV. This guide unpacks each concept in plain terms. For what we arrange day to day, see our [development finance](/services/development-finance/) service page. ## What Is Development Finance? It is funding for the purchase of land or buildings plus the costs of building on them, released in instalments as construction reaches agreed milestones. Where a mortgage lends against what exists today, development facilities lend against the completed project tomorrow. That single difference drives everything else: how much can be borrowed, why surveyors inspect progress before each release, and why interest rolls up alongside the loan instead of being paid monthly from your account. ## How Much Can You Borrow Against Gross Development Value? Gross development value is what the finished scheme should be worth or sell for. Lenders typically advance up to around 70% of GDV across land plus build costs, though the split varies: many expect you to fund the site purchase yourself while covering most of the construction spend, others stretch to 100% of works where your equity in the land provides their cushion. The governing measure is often expressed as loan to gross development value, and staying comfortably inside it is what keeps pricing competitive. ![Construction site with scaffolding during early build stages](/images/learning/development-finance-explained-1.jpg) ## How Do Staged Drawdowns Actually Work? The facility is drawn in tranches tied to milestones set at underwriting: foundations complete, wall plate level, roofed, first fix, practical completion. Before each release, a monitoring surveyor inspects the site and certifies that work matches the programme and budget. Funds then arrive within days, with interest accruing only on what has been drawn so far. This staging protects both sides: you never pay interest on undrawn money, and the lender never funds ahead of genuine progress. Budget discipline matters here, because cost overruns must be absorbed by you unless contingency was agreed at underwriting, which is why sensible applications carry a 10% contingency line from the start. ## Can First-Time Developers Get Funding? Yes, particularly on smaller schemes supported by professional teams. Lenders price inexperience through slightly higher rates, lower leverage and closer monitoring rather than refusing outright. What strengthens any application, whatever your track record, is the same: realistic costs, a programme with slack built in, an architect and contractor with relevant experience, and credible evidence of demand for the end units, whether that is sale comparables or rental evidence supporting an investment hold. ## What Happens When the Build Is Finished? Two exits exist. Sell the completed units and repay from proceeds, which suits developers building for profit. Or retain and refinance onto long-term [buy-to-let mortgages](/services/buy-to-let-mortgages/), common where schemes are designed to hold as investments. When sales run slower than planned, [development exit finance](/services/bridging-finance/) refinances the maturing facility onto cheaper terms without pressure selling, protecting your margin while remaining units find buyers. Planning the exit before drawing the first tranche is what separates smooth projects from stressful ones, and our guide to refinancing covers the mechanics in detail. ![Completed residential development ready for market](/images/learning/development-finance-explained-2.jpg) ## Is Development Finance Right for Your Project? If your scheme involves construction rather than purchase alone, and your profit depends on adding substantial value, staged development funding almost always beats bridging alternatives on cost and flexibility. Send us the purchase price, build costs and expected end value of your Manchester or Leeds project, and we will come back with an indication of borrowing capacity, structure and total cost, usually within one working day. ### Further Reading - [Bridging Loan Costs Explained](/learning/bridging-loan-costs-explained/) Why staged funding keeps interest costs down over longer programmes. - [Limited Company vs Personal Name Buy-to-Let](/learning/limited-company-buy-to-let/) Structuring ownership when you plan to hold rather than sell. - [How Does a Bridging Loan Work Step by Step?](/learning/how-does-a-bridging-loan-work/) The short-term alternative and when it fits better.