Rural Home Ownership Grants
Rural Home Ownership Grants, grants to help people in need to build their own homes in rural Scotland, are currently not available from the Scottish Government. They formed a small but vital tool to create more affordable housing opportunities in rural Scotland. They were particularly effective in helping households in remote rural areas become home owners. They enable people to build affordable houses in their community rather than having to leave to find an affordable home. At their most basis RHOGs helped households in housing need bridge the gap between what the could afford as a mortgage and the cost of the land and construction of a house suitable for their needs. RHOGs were repayable if the house was sold within 10 yrs. The Rural Housing Service is working with others to get RHOGs reinstated. For information we have made a copy of the RHOG Brochure and copy of the RHOG Guidance Note available below.
RHOGs were developed as a non-crofter version of Crofters House Grants. The latter are still paid out to a maximum of £22,000 (non- means tested)
In March 2010, Housing Minister Alex Neil announced that there was to be no budget for RHOGs in 2011/12 but that the Open Market Shared Equity (OMSEP) budget would be increased by £3 million to be targeted at helping first time buyers to purchase a home in 13 remote rural local authority areas. He also indicated that local authorities could if they wished make RHOG equivalent grants available to support self build using their procedes from 2nd Homes Council Tax - to date only Dumfries + Galloway Council in partnership with Dumfries + Galloway Small Communities Housing Trust have done this.
There are no figures available for the amount of the OMSEP budget which has been committed to rural areas (Scottish Government definition: communities with less than 3000 people = 18.5% of population). An analysis of shared equity developments in 2011/12 highlights the following percentages of development in rural Scotland:
New Supply Shared Equity: 11% of all developments (79 out of 723 – of which 68 were in North Region of the Scottish Government Housing Division)
New Supply with Developers: 5% of all developments (13 out of 256)
In many parts of rural Scotland there is a limited housing market, volumes of sales are very low and there is considerable pressure on house prices from second/holiday homes. With these market conditions the ability of OMSEP to work effectively is constrained. Island communities in particular have very limited housing markets; in Coll for example there have been 4 house sales in the last 4 years – all of these sales have been for housing beyond the threshold for OMSEP.
An unintended consequence of OMSEP may also be to exacerbate rural migration as rural households utilising this support may have to move to a larger village or town where house sale volumes are higher and the house price threshold qualifies.