Council seeks backing for £18m housing investment in Argyll and Bute

Argyll and Bute Council will spend almost £18 million regenerating and sustaining the area’s housing market if new proposals are approved by council members this week.

Six separate investment proposals, to be considered at a meeting of the full council on Thursday, are aimed at easing access to the market for first-time buyers, tackling the challenges faced by cash-strapped housing associations and addressing the problem caused by almost six hundred empty homes across the council area.

The money will come from the council’s strategic housing fund (SHF), which currently has £4.6m in the bank and receives around £1.8m from council tax on second homes in the area.

The six investment options include a ‘Local Authority Management Scheme’, aimed at first-time buyers who can afford mortgage repayments but not the initial deposit, in which the council would provide a lump sum to lenders to indemnify the risk of potential defaults on mortgage payments, allowing first-time buyers to be provided with a 95 per cent loan instead of the current market norm of 75 per cent.

Twenty-one English councils currently operate the scheme, and a legal template for Scotland is currently being drawn up with Lloyds and Santander, but has yet to be concluded.

To tackle the problem of the 581 long-term empty properties in the area, the council wants to use the SHF to provide refurbishment grants of up to £20,000 per property on condition that the owner lease the improved property to a registered social landlord (RSL) for at least ten years.

The proposals, if approved, would also see the creation of a loan facility of up to £20,000 to help owners make long-term empty homes habitable, this time on condition that the property be let to an RSL for at least five years.

In addition the council’s proposals would allow the SHF’s reserves to be used for long-term loan funding to social landlords, who are currently finding it extremely difficult to secure the money they need for longer-term development.

Last year the council agreed to lend £1.9 million from the SHF to Rothesay-based housing association Fyne Homes, to allow the association to repay a loan to the Royal Bank of Scotland.

The RBS loan was taken out as part of the financing of Fyne Homes’ Old Courthouse development in Rothesay, formerly the site of the town’s sheriff court and council buildings.