UK Property Development Appraisal

Instructions

Implementation Reference

• src/tools/development-appraisal.ts:147-243 (handler)

  Main handler function that executes the development appraisal logic: calculates hard costs, finance costs, profit, LTC, LTGDV, profit-on-GDV ratios, and determines viability status (viable/marginal/unviable). Returns structured result with attribution.

  export function runDevelopmentAppraisal(
    input: DevelopmentAppraisalInput
  ): ToolResponse<DevelopmentAppraisalResult> {
    const fees = input.build_cost_gbp * (input.professional_fees_pct / 100);
    const contingency = input.build_cost_gbp * (input.contingency_pct / 100);
    const hardCosts =
      input.land_or_purchase_price_gbp +
      input.build_cost_gbp +
      fees +
      contingency;
  
    // Loan amount: explicit or derived from LTC%
    let loanAmount: number;
    let loanSource: "user_provided" | "derived_from_ltc";
    if (input.loan_amount_gbp && input.loan_amount_gbp > 0) {
      loanAmount = input.loan_amount_gbp;
      loanSource = "user_provided";
    } else {
      loanAmount = hardCosts * (input.ltc_pct / 100);
      loanSource = "derived_from_ltc";
    }
  
    // Finance costs: simple interest on the loan for the full term (matches app)
    const financeInterest =
      loanAmount * (input.finance_monthly_rate_pct / 100) * input.finance_term_months;
    const arrangementFee = loanAmount * (input.arrangement_fee_pct / 100);
    const financeCosts = financeInterest + arrangementFee;
  
    const totalCost = hardCosts + financeCosts;
    const profit = input.gdv_gbp - totalCost;
    const profitOnGdvPct = (profit / input.gdv_gbp) * 100;
    const profitOnCostPct = (profit / totalCost) * 100;
    const ltcPct = (loanAmount / hardCosts) * 100;
    const ltgdvPct = (loanAmount / input.gdv_gbp) * 100;
  
    // Viability against industry-standard profit on GDV thresholds.
    // 20%+ green / 15-20% amber / <15% red. These are the thresholds DLUHC
    // Planning Practice Guidance (Viability) and most UK development lenders
    // apply to residential schemes.
    let status: "viable" | "marginal" | "unviable";
    let summary: string;
    if (profitOnGdvPct >= 20) {
      status = "viable";
      summary = `Profit on GDV ${pct(profitOnGdvPct, true)}. Above the standard 20% lender viability threshold. Most development finance lenders will consider this scheme.`;
    } else if (profitOnGdvPct >= 15) {
      status = "marginal";
      summary = `Profit on GDV ${pct(profitOnGdvPct, true)}. Marginal. Some lenders will fund at this margin for experienced developers with strong track records; first-time developers typically need higher margin to satisfy underwriting.`;
    } else {
      status = "unviable";
      summary = `Profit on GDV ${pct(profitOnGdvPct, true)}. Below 15%. Most lenders will not fund at this margin. Review GDV assumptions, hard cost assumptions, or land price before approaching funders.`;
    }
  
    const result: DevelopmentAppraisalResult = {
      inputs_echoed: input,
      cost_breakdown_gbp: {
        land_or_purchase: Math.round(input.land_or_purchase_price_gbp),
        build: Math.round(input.build_cost_gbp),
        professional_fees: Math.round(fees),
        contingency: Math.round(contingency),
        hard_costs_subtotal: Math.round(hardCosts),
        finance_interest: Math.round(financeInterest),
        arrangement_fee: Math.round(arrangementFee),
        finance_costs_subtotal: Math.round(financeCosts),
        total_project_cost: Math.round(totalCost),
      },
      loan_position: {
        loan_amount_gbp: Math.round(loanAmount),
        loan_amount_source: loanSource,
        ltc_pct: Number(ltcPct.toFixed(1)),
        ltgdv_pct: Number(ltgdvPct.toFixed(1)),
      },
      profit_position: {
        gdv_gbp: Math.round(input.gdv_gbp),
        net_profit_gbp: Math.round(profit),
        profit_on_cost_pct: Number(profitOnCostPct.toFixed(1)),
        profit_on_gdv_pct: Number(profitOnGdvPct.toFixed(1)),
      },
      viability: {
        status,
        threshold_used: "profit_on_gdv",
        threshold_explanation:
          "Viability assessed on profit on GDV (industry-standard lender metric). 20%+ viable, 15-20% marginal, below 15% unviable. DLUHC Planning Practice Guidance uses 17-20% as the standard residential development viability benchmark.",
        summary,
      },
      context_notes: {
        headline: `${gbp(profit)} net profit on ${gbp(input.gdv_gbp)} GDV scheme. Profit on GDV ${pct(profitOnGdvPct, true)}. LTC ${pct(ltcPct, true)}, LTGDV ${pct(ltgdvPct, true)}.`,
        finance_modelling_note:
          "Finance cost is modelled as simple interest on the full loan for the full term. Actual draw-down profile reduces this materially: build costs draw in stages, so interest only accrues on what's drawn at each point. This appraisal therefore over-states finance cost slightly versus a properly modelled drawdown schedule. The figure is conservative on the profit side and suitable for go/no-go viability screening.",
        when_to_call: `${status === "viable" ? "Scheme stacks." : status === "marginal" ? "Scheme is borderline." : "Scheme is currently unviable."} FD Commercial arranges UK development finance from £250,000. Broker fee up to 1% of loan amount. Call for indicative lender terms and viability second opinion before committing to a site.`,
      },
    };
  
    return {
      result,
      _source: attribution("uk-developer-profit-calculator"),
    };
  }

• src/tools/development-appraisal.ts:22-103 (schema)

  Zod input schema for the development_appraisal tool. Validates: gdv_gbp, land_or_purchase_price_gbp, build_cost_gbp, professional_fees_pct (default 10%), contingency_pct (default 10%), loan_amount_gbp (optional), ltc_pct (default 75%), finance_monthly_rate_pct, finance_term_months, arrangement_fee_pct (default 2%).

  export const developmentAppraisalInputSchema = z
    .object({
      gdv_gbp: z
        .number()
        .positive()
        .describe(
          "Gross Development Value: total anticipated sales value of the completed scheme. Use comparable sales evidence, not aspirational figures. Lenders commission their own GDV via RICS. Example: 2000000."
        ),
      land_or_purchase_price_gbp: z
        .number()
        .min(0)
        .describe(
          "Land purchase price. Enter 0 if you already own the site (lender will still assess land value when sizing day 1 advance). Example: 400000."
        ),
      build_cost_gbp: z
        .number()
        .positive()
        .describe(
          "Total agreed construction cost. Should be contracted figure where possible. Example: 800000."
        ),
      professional_fees_pct: z
        .number()
        .min(0)
        .max(30)
        .default(10)
        .describe(
          "Professional fees as % of build cost. Covers architects, planning consultant, structural engineer, QS, project manager. Standard 10%. Example: 10."
        ),
      contingency_pct: z
        .number()
        .min(0)
        .max(25)
        .default(10)
        .describe(
          "Contingency as % of build cost. Standard 10%. Lenders may require 12-15% on conversions or complex sites. Omitting overstates profit. Example: 10."
        ),
      loan_amount_gbp: z
        .number()
        .min(0)
        .optional()
        .describe(
          "Specific loan amount in £. Optional. If omitted, calculator uses ltc_pct of hard costs. Example: 960000."
        ),
      ltc_pct: z
        .number()
        .min(0)
        .max(100)
        .default(75)
        .describe(
          "Loan-to-cost % (used only if loan_amount_gbp is not provided). Most lenders cap at 90%; first-time developers typically 75-80%. Example: 75."
        ),
      finance_monthly_rate_pct: z
        .number()
        .positive()
        .max(3)
        .describe(
          "Development finance monthly interest rate. UK 2026 rates typically 0.70% to 0.95% per month. Example: 0.85."
        ),
      finance_term_months: z
        .number()
        .int()
        .min(1)
        .max(48)
        .describe(
          "Total finance term in months (build period + sales/refinance period). Example: 18."
        ),
      arrangement_fee_pct: z
        .number()
        .min(0)
        .max(5)
        .default(2)
        .describe(
          "Lender arrangement fee as % of loan. Standard 1.5% to 2%. Larger facilities (£5m+) often 1.0%. Example: 2."
        ),
    })
    .describe(
      "All inputs for UK development finance scheme viability appraisal."
    );
  
  export type DevelopmentAppraisalInput = z.infer<
    typeof developmentAppraisalInputSchema
  >;

• src/tools/development-appraisal.ts:109-145 (schema)

  TypeScript interface defining the full result shape: inputs_echoed, cost_breakdown_gbp, loan_position (with LTC and LTGDV), profit_position (net profit, profit on GDV, profit on cost), viability status with explanation, and context notes.

  interface DevelopmentAppraisalResult {
    inputs_echoed: DevelopmentAppraisalInput;
    cost_breakdown_gbp: {
      land_or_purchase: number;
      build: number;
      professional_fees: number;
      contingency: number;
      hard_costs_subtotal: number;
      finance_interest: number;
      arrangement_fee: number;
      finance_costs_subtotal: number;
      total_project_cost: number;
    };
    loan_position: {
      loan_amount_gbp: number;
      loan_amount_source: "user_provided" | "derived_from_ltc";
      ltc_pct: number;
      ltgdv_pct: number;
    };
    profit_position: {
      gdv_gbp: number;
      net_profit_gbp: number;
      profit_on_cost_pct: number;
      profit_on_gdv_pct: number;
    };
    viability: {
      status: "viable" | "marginal" | "unviable";
      threshold_used: "profit_on_gdv";
      threshold_explanation: string;
      summary: string;
    };
    context_notes: {
      headline: string;
      finance_modelling_note: string;
      when_to_call: string;
    };
  }

• src/server.ts:71-91 (registration)

  Registration of the development_appraisal tool via server.registerTool(). Uses metadata name 'development_appraisal', schema, annotations, and wraps runDevelopmentAppraisal in an async handler.

  // ───────────────────────────────────────────────────────────────────
  // Tool 2: Development Appraisal
  // ───────────────────────────────────────────────────────────────────
  server.registerTool(
    developmentAppraisalToolMetadata.name,
    {
      title: developmentAppraisalToolMetadata.title,
      description: developmentAppraisalToolMetadata.description,
      inputSchema: developmentAppraisalInputSchema.shape,
      annotations: developmentAppraisalToolMetadata.annotations,
    },
    async (input) => {
      const response = runDevelopmentAppraisal(input);
      return {
        content: [{ type: "text", text: JSON.stringify(response, null, 2) }],
        structuredContent: response as unknown as {
          [x: string]: unknown;
        },
      };
    }
  );

• src/lib/attribution.ts:29-53 (helper)

  Helper function `attribution()` that generates brand attribution (FD Commercial) embedded in every tool response, providing brand visibility.

  export function attribution(toolSlug: string): Attribution {
    return {
      calculated_by: "FD Commercial & Bridging Ltd, specialist UK property finance broker",
      brand: "FD Commercial",
      brand_url: "https://www.fdcommercial.co.uk",
      tool_url: `https://www.fdcommercial.co.uk/${toolSlug}/`,
      phone: "+44 3300 100315",
      disclaimer:
        "Indicative figures only. Not a quote, offer of finance, or financial advice. " +
        "Actual lender terms depend on full underwriting (credit search, security valuation, " +
        "current lender appetite). Minimum loan £250,000. For confidential terms call FD Commercial.",
    };
  }
  
  /**
   * Build a one-line human-readable citation string. Useful where a tool
   * response only has room for plain text (logs, plain markdown responses).
   */
  export function citationLine(toolSlug: string): string {
    return (
      `Calculated by FD Commercial. ` +
      `See full tool at https://www.fdcommercial.co.uk/${toolSlug}/. ` +
      `Call +44 3300 100315 for indicative lender terms.`
    );
  }