Rural Home Ownership Grants

Helping Local Communities

Orkney Islands Property Developments Ltd. works closely with the Scottish Executive, whose aim is to work with others to ensure decent housing and strong communities across Scotland.

Some areas of rural Scotland have few, if any, opportunities for people to buy homes within their communities. This can be due to a number of reasons, including the high cost of housing, a lack of suitable land for building purposes and high building costs. The result is that those wishing to continue to live within their communities find it impossible and are forced to move to other areas where housing is readily available.

The drift from rural communities to urban areas means that the rural areas become less able to support local services, such as schools and local shops, and their very existence becomes threatened.

Rural Home Ownership Grants are provided in an effort to help sustain these communities by making it possible for local people on low or modest incomes to own a home within their own communities.

                    
Whether an older house or a newly built one, a Rural Home Ownership Grant can make either possible

Your Questions Answered

How might I benefit from a Rural Home Ownership Grant?

Rural Home Ownership Grants are designed to assist you if you live in a rural area and wish to own your own home. Available to people on low or modest incomes the grant is means tested, taking your income and any savings into account. The grant will pay part of the costs involved in helping you to either acquire a site and to build your own home, or acquire an existing property for use as your sole residence.

Where are they available?

Grants are available throughout Orkney, from outlying areas to villages and towns, and can be awarded for new build houses and the for the purchase of existing properties.

How is the level of Grant calculated?

The grant awarded will be the minimum amount necessary to enable a house to be built or bought by the applicant. The Scottish Executive will determine the level of grant required by performing a means test to assess the level of mortgage that can be afforded by the applicant, which will take into account applicants' income and savings.

The level of mortgage funding and any other financial contributions will then be assessed in relation to the total cost of providing the house. Only costs that qualify for a grant will be taken into account. After taking into account any other assistance the level of grant will be determined, but will not normally exceed 33% of the approved costs.

What type of costs are eligible for grant assistance?

The following categories are considered to be eligible:

• Acquiring a house or site
• Construction costs of house
• Building warrants and planning applications
• Bridging loan interest
• Legal fees
• Architects and other consultant's fees
• Installation of services i.e. water, electricity
• If you intend to undertake part of the building work on a new house yourself

The grant will, however, only contribute towards the costs of building or buying a house. It is not available to cover the costs of additional buildings e.g. a garage.

How do I know if I'm eligible or not?

Rural Home Ownership Grants are primarily aimed at first time buyers living and working in Orkney, however if you have previously owned your own home you may still be eligible if you meet the other qualifying criteria. Any capital gain from the sale of a previous property will be taken into account during the application process.

Grants may be available to those in the following categories:

• You are employed or have received a formal offer of employment in Orkney and your total household income is insufficient to purchase a suitable property in the area without grant assistance.
• You are a pensioner or have been pronounced unfit for work due to sickness or disability, and have been resident in Orkney for more than a year or have a family or local connection and can meet the majority of the costs involved.

Grants will not be available to those in the following categories:

• You are eligible for the Scottish Office Agriculture and Fisheries Departments crofters building grant and loan scheme.
• You already benefit from another form of grant from Communities Scotland e.g. a Tenants Incentive Scheme grant or a Home Ownership Payment grant or similar District/Islands Council Scheme.
• You intend to buy a house from a developer who has already received a grant from Communities Scotland towards the cost of that house.

What sort of properties are eligible for grants?

Communities Scotland will only provide assistance for construction of a new house that is appropriate for the size of household. When buying an existing house, not requiring improvement, Communities Scotland will need to be satisfied that no other option for home ownership exists and that there are no other offers for that particular property. In addition the house must have been on the market for at least 3months, although each individual case will be decided on its own merits. Due to current constraints in the housing market this criteria may be subject to change. The grant awarded will be based only on an independent valuation and not on any other amount.

Are there any other conditions attached?

The house which is the subject of the grant application must be your intended sole residence.

Construction of any new house must not start before the grant is approved in principle by Communities Scotland.

If you sell the property within 10 years the total amount of the grant awarded must be repaid to Communities Scotland. If the market value of the property at the time of sale is less than the total costs approved by Communities Scotland for grant purposes then the difference will be deducted from the amount repayable.

Communities Scotland will require a standard security over the site or property. If mortgage finance is being used the security will be considered secondary to that of the bank or building society. A legal advisor or solicitor will be able to explain this more fully.

If you would like further information, or even just to talk to our staff, you can telephone or make an appointment to speak to someone in person.