Developer Profit Calculator UK
This calculator works out the net profit, profit on cost and profit on GDV for a UK residential or commercial development scheme. Enter your total project costs, including land, build, professional fees, contingency and finance, alongside your anticipated GDV, and the figures update instantly.
If you already own the land, set the purchase price to zero. Finance costs can be entered manually or estimated using our development finance calculator.
What this calculator covers
Land or purchase price (zero if already owned). Purchase costs including SDLT and legal fees. Professional fees covering architects, planning consultants and quantity surveying. Warranties and insurance. Build costs with contingency auto-set at 10%. Finance costs entered manually. GDV as the total anticipated sales or refinance value on completion.
Results show total project costs, net profit in pounds, profit on cost as a percentage, and profit on GDV as a percentage. A viability indicator flags whether the scheme is likely to stack for most lenders.
UK Developer Profit Calculator
Results update automatically. All figures are indicative estimates.
Indicative estimates only. Excludes VAT, sales agent fees, holding costs and other variables. Finance costs should be entered separately using the development finance calculator for accuracy. Broker fee up to 1% of loan amount applies to development finance arranged through FD Commercial. Speak to us before committing to a site.
Profit on cost vs profit on GDV
Both metrics measure profitability but from different reference points. Profit on cost (also called return on cost) divides your net profit by total project costs. It tells you what return you made on the money you put in and borrowed. Profit on GDV divides net profit by the completed value. It is the metric lenders and funders most commonly reference when assessing viability.
Most lenders and development appraisal tools use profit on GDV as the primary viability check. A scheme showing 20% profit on cost may show only 15% on GDV. That is why quoting both matters when presenting a project to a funder.
| Profit on cost | Profit on GDV | Viability |
|---|---|---|
| 20%+ | 15%+ | Strong. Most lenders will consider the scheme viable. |
| 15 to 20% | 12 to 15% | Marginal. Lender appetite depends on scheme type and developer track record. |
| Below 15% | Below 12% | Difficult. Most lenders will not fund at this margin. Review costs or GDV assumptions. |
These are general thresholds. Some lenders apply different hurdles for different scheme types, and first-time developers are often required to demonstrate higher margins to offset perceived risk.
Example: 2-unit new build, South West
Land: £250,000. Purchase fees: £15,000. Professional fees: £25,000. Warranties: £8,000. Build costs: £350,000. Contingency: £35,000 (10%). Finance costs: £45,000. Total costs: £728,000.
GDV: £950,000. Net profit: £222,000. Profit on cost: 30.5%. Profit on GDV: 23.4%. Scheme viable. Above typical lender thresholds.
What to include in each cost category
Land or purchase price is the agreed acquisition price. If you already own the site, enter zero, but bear in mind that lenders will still assess the value of the land when structuring the day 1 advance. Purchase fees cover SDLT, legal costs on acquisition and any finders fees. Professional fees include architects, planning consultant, structural engineer, quantity surveyor and project manager costs. Warranties and insurance typically covers structural warranties (such as NHBC or similar) and site insurance during the build period.
Build costs are the contracted construction costs. Contingency is automatically set at 10%, which is standard for most appraisals. Finance costs should reflect the full rolled-up interest and arrangement fees from your development finance facility. If you have not yet modelled those costs, use the development finance calculator first, then bring the total finance cost figure back into this tool.
According to the DLUHC Planning Practice Guidance on Viability, 17 to 20% profit on GDV is the standard benchmark used in development viability assessments submitted in support of planning applications for residential development. Schemes below this threshold are typically considered unviable for planning purposes, and lenders apply the same framework when assessing development finance applications.
Source: DLUHC, Planning Practice Guidance: Viability (gov.uk)According to DLUHC housing supply statistics, new housing starts in England totalled approximately 130,000 in 2023/24, a decline of around 20% from the previous year. Rising build costs and higher development finance rates reduced scheme viability across many markets, making accurate appraisal before site acquisition more critical than at any point since 2012.
Source: DLUHC, House Building: New Build Starts and Completions (gov.uk)Also on mobile
Use this calculator and 3 more inside the FD Commercial app
Free on Google Play. No signup, no in-app purchases. Includes the Bridging Cost Analyser, Development Appraisal, BTL Stress Tester, and a Stamp Duty Calculator covering SDLT, LBTT and LTT.
If the numbers stack, the next step is sourcing the right development finance. We know which lenders will work with your LTC and margin position, and what they require on developer track record. Broker fee up to 1% of loan amount.
Call 03300 100315Frequently asked questions
What profit margin do lenders require to fund a development scheme?
Most development finance lenders require a minimum profit on GDV of 15 to 20% before they will consider funding a scheme. The DLUHC Planning Practice Guidance uses 17 to 20% profit on GDV as the standard residential viability benchmark. Schemes below 15% on GDV are difficult to fund regardless of the developer's track record. First-time developers are typically required to demonstrate margins at the higher end of this range to offset the lender's additional risk exposure.
What is the difference between profit on cost and profit on GDV?
Profit on cost divides net profit by total project costs. It tells you what return you made on every pound invested. Profit on GDV divides net profit by the completed value of the scheme. It is the metric development finance lenders and planning viability assessors primarily use. A scheme with 25% profit on cost and a GDV of £1 million and total costs of £800,000 shows 20% profit on GDV. The same profit in pounds produces a higher percentage on cost than on GDV. Always present both when approaching a lender.
What contingency should I include in a development appraisal?
10% of build costs is the standard contingency used in most development appraisals and is what this calculator applies automatically. Some lenders require higher contingency for complex schemes, conversions, or sites with unknown ground conditions. For residential new build schemes with a fixed-price main contract, 10% is generally accepted. Omitting contingency or using a figure below 10% will overstate your profit and may cause lenders to reduce the amount they are willing to advance.
Should I include finance costs in the development appraisal?
Yes. Finance costs are a genuine project cost and must be included for the appraisal to reflect real profitability. Omitting them produces an overstated profit figure that will not survive lender scrutiny. Use our development finance calculator to model rolled-up interest and arrangement fees based on your loan amount, term, and interest rate, then enter the total finance cost in this tool. The finance cost for a typical 12-month residential scheme at current rates will reduce profit on GDV by 3 to 6 percentage points depending on the facility size.
What GDV should I use and how do I calculate it?
GDV is the total anticipated value of the completed scheme, based on market sales values at the time of appraisal. For residential development, GDV is the sum of the anticipated sale prices of all units. Use comparable sales evidence from the past three to six months in the immediate area, adjusted for size, specification, and condition. Do not use aspirational figures. Lenders will commission their own GDV assessment via a RICS-qualified surveyor and will base their loan on that figure, not on yours.
Why do lenders use profit on GDV rather than profit on cost?
Lenders use profit on GDV because it measures profitability relative to the asset they are lending against. Their security is the completed development value. If the scheme is delayed, costs overrun, or the market softens, the GDV provides the lender's downside protection. A scheme with high profit on cost but low profit on GDV suggests costs are low but so is the completed value, which provides limited buffer for the lender. Profit on GDV is the more conservative and more lender-relevant metric.
Your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it. Calculator results are indicative only. Actual project profitability depends on final costs, sales values, finance terms, and market conditions at completion. Results do not constitute financial advice. Broker fee up to 1% of loan amount applies to development finance arranged through FD Commercial.