The Royal Bank of Scotland is reviewing its decision to reject two Skye crofters’ mortgage application because they had received Croft House Grant funding from the Scottish Government.
Last week Cabinet Secretary for the Rural Economy and Connectivity wrote to the Royal Bank of Scotland urging them to give fair mortgage offers to crofters.
Currently, those in receipt of the Croft House Grant have been unable to secure an RBS mortgage because the bank fears in the event of insolvency that the Scottish Government’s rights to recover monies under the scheme would rank ahead of the financial institution’s right to recover the home loan.
The saga came to light after crofters on the Isle of Skye raised the matter with constituency MSP Kate Forbes.
Ms Forbes wrote to the Cabinet Secretary raising these concerns, particularly in light of the positive response in the Highlands and Islands to the Croft House Grant Scheme. Fergus Ewing MSP wrote back to the Highland MSP pledging his support and promising to write to RBS.
In his response and letter to RBS, Fergus Ewing MSP noted that “a misperception” had been created because the Government’s rights are held against persons, whereas the bank’s are held against the property. Mr Ewing added that he hoped his letter “offers the necessary assurance” to RBS.
Kate Forbes MSP said: “I am delighted that Fergus Ewing’s letter to RBS regarding the lack of mortgage support to crofters in receipt of funding for the Croft House Grant scheme has prompted RBS to reconsider its actions.
“The Croft House Grant scheme is a fantastic initiative for the Highlands and Islands because it supports the need for housing and it helps crofters who would not have the funds to rebuild or improve their home.
“I would like to see the banks supporting farmers and crofters far more than they do currently, and hopefully Fergus Ewing’s intervention will do that.”