Campaigners say houses now among UK’s least affordable owing to rise of holiday rentals

Campaigners on the Isle of Arran have called for help to cope with a housing crisis that has left hundreds of people without permanent homes.

The Arran Economic Group (AEG) hopes to be the first community organisation in Scotland to use government funds to build dozens of affordable homes aimed at local workers, which will be given out based on economic rather than social need.

The group, made up of local business people and community activists, believes houses on the island are among the least affordable in the UK. Arran’s average annual wage is £24,000, but average house prices are eight to 10 times that, giving it an affordability ratio nearly as bad as in London.

The problem has been exacerbated by the number of properties used for tourists or bought by retirees, who take up a significant number of homes on the island, pushing up prices and resulting in shortages of homes to rent.

An investigation by the Guardian has found that 23% of the houses on Arran are used for holiday homes or second homes. This is one of the highest rates in the UK, and is thought to be second only to St Ives in Cornwall where a quarter of properties are holiday homes.

'Nothing's affordable': buying a home now just a dream on Arran Read more

Data from North Ayrshire council, the island’s local authority, shows that in some villages nearly 40% of homes have been bought for holiday use, while in Sliddery, on the south end of Arran, nearly half of its 73 properties are holiday homes.

That has meant hundreds of workers on the island, including hotel staff, shop workers, apprentices, teachers, social care workers and even some business owners, are unable to find homes to buy or rent because prices are too high and there is a shortage of properties.

Sheena Borthwick-Toomey, the general manager for the AEG, said many working-age people leave Arran as a result, worsening a labour shortage on the island. Health and social care staff needed for Arran’s ageing population of retirees need to commute by ferry from the mainland because homes on Arran are unaffordable.

The Scottish government is studying a bid from the Arran Development Trust, a company set up by the AEG, for £8.5m from its rural and islands housing fund to build 43 houses and supply 14 self-build plots, which will be prioritised for the island’s workforce.

Borthwick-Toomey said they wanted to avoid the drastic measures used in St Ives, which has banned construction of new holiday homes to prioritise homes for residents. “We need to solve the problem we face now, and also increase Arran’s resident population, so the whole island sustains itself,” she said.

Facebook Twitter Pinterest In the village of Lochranza 37% of homes have been bought for holiday use. Photograph: Murdo MacLeod/The Guardian

Joe Cullinane, the council leader, said the AEG’s figures had shocked the council. “The AEG has shone a light on the situation on the island, which is probably one of the most extreme in the country and which is really quite staggering,” he said.

'Nothing's affordable': buying a home now just a dream on Arran Read more

As a result, Cullinane said the authority was building 34 new council houses on Arran – the first time it had done so in 30 years. The Trust Housing Association, which took on the council’s previous stock on Arran, has proposals to build about 20 homes for local people to rent.

He said council housing officials would also be visiting Arran this month to investigate the holiday homes sector, to make sure owners complied with rules on rentals and were registered to pay the 100% extra council tax imposed on holiday homes.

He said the extra homes would not solve Arran’s problem entirely, so the council would need to consider relaxing planning rules on the island to increase the availability of land. The Scottish government’s new strategy for supporting the country’s islands needed to be flexible enough to meet Arran’s needs too, he said.