How Open Market Value Is Used in BMV Bridging Calculations
Understanding how Open Market Value (OMV) is used within below market value (BMV) bridging loan calculations is essential for property investors seeking to maximise leverage while remaining compliant with lender criteria. OMV forms the foundation of nearly all UK bridging valuations, but when a property is purchased below market value, the relationship between purchase price, OMV, and loan-to-value (LTV) becomes more technical than in standard transactions.
This guide explains how OMV is established, how lenders apply it to BMV bridging loans, and how real-world calculations differ from headline assumptions.
For a broader view of supply drivers behind discounted stock, see our analysis of UK Below Market Value Property Trends 2025–2026, which explores why BMV acquisitions remain prevalent across auctions, probate stock, motivated sellers, and landlord portfolio exits.
What Is Open Market Value (OMV)?
Open Market Value represents the valuation figure agreed between a willing buyer and seller in an open market after adequate exposure, assuming both parties act knowledgeably and without compulsion.
In bridging finance, OMV is always established by an independent RICS surveyor instructed by the lender. It is not influenced by:
• The buyer’s negotiated purchase price
• Vendor distress or speed motivations
• Off-market marketing methods
• Estate-agent appraisals
Instead, OMV is derived from comparable evidence, condition assessments, location factors, and current market demand. Where refurbishment or development potential exists, valuers assess the property in its current state only, not its projected post-works value (unless a separate GDV valuation is specifically commissioned).
The Core BMV Calculation Principle
In standard bridging cases, lenders apply LTV directly to the purchase price or OMV — whichever is lower.
In BMV deals, lenders typically calculate LTV solely against OMV, provided the purchase meets eligibility requirements. This distinction allows borrowers to access a higher cash advance relative to invested equity.
The fundamental calculation becomes:
Loan Amount = LTV × OMV
…rather than:
Loan Amount = LTV × Purchase Price
This difference creates the leverage benefit of BMV transactions.
Worked Example – Standard Purchase vs BMV Purchase
Standard Purchase:
• OMV = £200,000
• Purchase price = £200,000
• LTV at 70% = £140,000 loan
• Cash input = £60,000 (plus fees)
BMV Purchase:
• OMV = £200,000
• Agreed purchase price = £165,000
• LTV at 70% = £140,000 loan
• Cash input = £25,000 (plus fees)
The loan remains identical in both scenarios. The difference is the reduced capital requirement, which allows investors to recycle funds more efficiently into subsequent acquisitions.
Lender Safeguards on OMV Usage
Although many lenders support BMV structures, they apply safeguards that determine how OMV can be used in calculations.
Minimum Discount Threshold
Most lenders require a minimum BMV discount, typically between 10% and 15% below OMV, to demonstrate the transaction is bona fide rather than artificially structured.
“Day One” Equity Caps
Some lenders place an effective ceiling on how much equity can be released immediately. Even if OMV supports a higher loan, the lender may cap advances at:
• 75–80% of purchase price, or
• A blended calculation between OMV and purchase price
This prevents developers or investors from extracting unrealistically high leverage based purely on valuation uplift. These restrictions are typically driven by lender underwriting policy rather than valuation methodology. For a deeper explanation of how lenders assess this risk in practice, see our guide on how BMV lender underwriting works.
Valuer’s Market Commentary
In uncertain locations or cooling micro-markets, surveyors may adopt more conservative comparable selections, which can compress OMVs. This has become more common during 2024–2025 as lenders requested tighter risk commentary around resale demand and liquidity.
Title Splits and Chain Transactions
Where properties are acquired via:
• Sub-sales
• Option agreements
• Corporate purchase chains
• Off-market development exits
lenders often re-examine OMV versus purchase methodology. In multi-step transactions, some funders calculate LTV based on the latest contracted purchase price rather than open OMV, regardless of the valuation figure produced.
These transactions remain financeable, but lender selection becomes more critical — often requiring specialist BMV-capable funders.
OMV vs GDV – A Common Misunderstanding
A frequent investor misconception is assuming post-refurbishment or development values can be leveraged under OMV rules.
They cannot.
In BMV bridging:
• OMV = value at time of inspection, in current condition
• GDV = post-works value, irrelevant to initial LTV calculations unless separate development or uplift facilities are structured
Only when development finance or refurbishment uplift facilities are used can staged drawdowns be applied against projected values — and even then, lenders work from cost schedules rather than headline GDV multiples.
Mortgage Exit Considerations
BMV bridging transactions function most effectively where a refinance exit is planned. After 6 months of ownership, some remortgage lenders permit refinancing against a new valuation rather than the original purchase price, potentially recognising uplift or renovation improvements.
This enables developers to recycle capital if:
• The refinance valuer acknowledges improvement value
• Seasonal or time-based growth has occurred
• Title seasoning requirements are met
Before bridging, borrowers should ensure that exit mortgage criteria align with lender seasoning policies — otherwise leverage benefits may be stranded.
Where OMV Strategy Fits into BMV Bridging
OMV-based calculations allow BMV bridging to remain one of the most powerful deployment tools for UK property investors — but only when lender mechanics are properly matched to transaction structure.
For a full breakdown of lender criteria, discount thresholds, legal requirements and refinance strategy considerations, see our main explainer:
👉 Below Market Value Bridging Loans – Complete UK Guide This outlines where OMV calculations can be applied cleanly, where lender restrictions apply, and how specialist brokers structure compliant BMV transactions in today’s market.