UTB 70% LTGDV Development Loan: A development loan is not assessed on the completed building alone. The lender must first understand how the site, costs, construction programme and repayment strategy connect.
This 2021 case study involved a £3.46 million development finance facility from United Trust Bank, commonly known as UTB. The funding represented 70% of the project’s £5 million gross development value.
The transaction supported The Gateway, a residential-led mixed-use development in central Cambridge.
At a Glance
- UTB provided a £3.46 million development facility.
- The loan represented 70% loan-to-gross-development-value.
- The scheme had an estimated £5 million gross development value.
- It included 13 apartments and ground-floor commercial space.
- The first drawdown took place 23 working days after credit approval.
- Planning, developer experience, costs and the exit strategy remained central to the lender’s assessment.
What Was the UTB Development Loan?
Factory Estates acquired a brownfield site with planning permission for The Gateway.
The proposed five-storey building included:
- 13 residential apartments;
- commercial units at street level;
- a residential-led mixed-use structure; and
- three reported off-plan sales during the early project stage.
UTB agreed a £3.46 million development facility against the scheme’s reported £5 million gross development value.
The arrangement formed part of the Housing Accelerator Fund. Homes England and UTB launched the fund in February 2021 to support small and medium-sized housebuilders.
What Does 70% LTGDV Mean?
LTGDV means loan-to-gross-development-value.
It compares the development loan with the estimated market value of the completed project.
In this case:
- Development facility: £3.46 million
- Reported gross development value: £5 million
- LTGDV: approximately 70%
LTGDV is only one part of a lender’s assessment. A lender may also examine the total project cost, borrower contribution and available contingency.
The completed value remains an estimate until supported by valuation evidence. Therefore, the percentage does not remove construction, sales or repayment risk.
Why Was the Funding Structure Significant?
The transaction showed how higher-geared development finance could support an experienced regional developer.
However, the facility was not based on the site value alone. The available evidence indicated that the lender also considered:
- the developer’s previous projects;
- existing planning permission;
- the build programme;
- the projected development value;
- the residential and commercial composition;
- expected sales;
- the requested funding level; and
- the proposed repayment route.
Factory Estates was new to UTB. Nevertheless, its previous development work in Salford and Manchester provided relevant experience for the lender to examine.
Experience does not guarantee approval. It gives the underwriter evidence of how the developer has previously controlled costs, completed work and managed sales.
How Did the Drawdown Process Work?
Development finance is normally released in stages rather than as one payment.
An initial amount may support the acquisition or refinance. Later drawdowns can then fund certified construction costs as work progresses.
For The Gateway, the first drawdown reportedly completed 23 working days after credit approval.
That timetable was notable because the site had been purchased at auction and the transaction faced legal complications.
However, advisers should not present a previous completion time as a future service guarantee. Current timescales can depend on:
- valuation access;
- legal enquiries;
- planning documents;
- professional reports;
- construction information;
- borrower checks; and
- satisfaction of pre-drawdown conditions.
Speed usually begins with the quality of the information submitted.
The quotes
Other lenders might have found these issues problematic. However, thanks to UTB and Gareth at Excellion, banking has been the smoothest part of this project. This is a rare experience for us. The Housing Accelerator Fund has truly delivered as promised!”
Gareth Taylor of Excellion Capital commented, “This project attracted Factory Estates because plans were already in place, allowing the team to move quickly. I introduced a lender that could meet their need for speed. From my perspective, UTB was delivered on all counts.
They agreed to a higher-geared, 70% LTGDV facility. The whole team at UTB worked swiftly to provide a quick drawdown. When the time came, my client had the money available when needed.”
Philip Kirkwood, director of property development at United Trust Bank, commented: “I’m delighted we supported this Factory Estates development with a higher-geared facility through our innovative Housing Accelerator Fund. Factory Estates is a successful regional developer that builds high-quality homes in areas of need. Working with Chris Bowman has been a pleasure, and we were able to agree on and finalise this facility in a few short weeks.
We collaborated closely with the Factory Estates team and their excellent professionals to ensure funding was quickly implemented. This scheme is a great example of how specialist development lenders like UTB can partner with public agencies like Homes England. Together, we structure and deliver innovative funding solutions that give SME housebuilders the support they need to continue building.
I look forward to supporting many more Factory Estates developments in the future.”
What Evidence Supports a Development Finance Case?
A well-prepared development finance submission may include:
- planning permission and discharged conditions;
- a detailed schedule of works;
- a cost plan from an appropriate professional;
- development appraisal figures;
- evidence of the borrower’s contribution;
- the developer’s project history;
- professional team details;
- a realistic construction timetable;
- contingency provisions;
- valuation evidence; and
- a defined exit strategy.
More documents do not automatically create a stronger application. Each document should answer a foreseeable underwriting question.
Advisers handling complex projects can review Connect’s specialist finance solutions for further case-placement context.
Why Does the Exit Strategy Matter?
A development lender must understand how the facility will be repaid.
For a residential-led scheme, repayment may come from:
- individual unit sales;
- a sale of the completed development;
- refinancing retained units;
- longer-term commercial finance; or
- another evidenced source of capital.
Three reported off-plan sales provided some early evidence of demand at The Gateway. However, reservations or offers should not be treated as completed sales.
The lender would still need to consider marketing periods, sales values and possible delays.
Where construction has finished but sales remain incomplete, development exit finance may provide a separate refinancing route. It requires its own underwriting and repayment assessment.
What Can Mortgage Advisers Learn From the Case?
The central lesson is not simply that a lender reached 70% LTGDV.
The more important point is how the project was presented.
The lender could identify:
- what was being built;
- who would deliver it;
- how much it would cost;
- when funding was required;
- what the completed scheme might be worth; and
- how the debt would be repaid.
A mortgage network can support this process through lender access, criteria information and case-placement experience.
Connect’s mortgage network lender panel includes mainstream and specialist property finance providers. Panel access does not replace research, suitability checks or detailed case packaging.
Clients seeking advice can also use the Connect Experts directory to find a development finance adviser. Connect Experts is the consumer-facing adviser directory associated with the wider Connect network.
Development Finance Depends on Connected Evidence
A development may begin with an architectural plan. Funding begins with evidence.
Land, planning, construction, value and repayment cannot be assessed as separate ideas. Each one changes the risk attached to the others.
The UTB facility demonstrated how a higher-geared structure could support an established developer when the proposal, experience and funding route were presented clearly.
It should be viewed as a historical case study rather than a statement of guaranteed current lending terms. Product availability, criteria and pricing can change.
UTB Development Loan FAQs
How much did UTB lend for The Gateway?
UTB reportedly provided a £3.46 million development finance facility. The completed scheme had an estimated gross development value of £5 million.
What was the LTGDV?
The facility represented approximately 70% loan-to-gross-development-value.
Does 70% LTGDV mean a lender funds 70% of every project cost?
No. LTGDV compares the loan with the expected completed value. The lender may separately limit lending against project costs and require the developer to provide equity and contingency funds.