28th May 2010
The planning committee of the Cairngorms National Park Authority (CNPA) has agreed to remove a Section 75 legal agreement in an exceptional case, which should allow a Newtonmore couple obtain a mortgage for their croft house.
A Section 75 legal agreement is most commonly used to allow a house in a rural location where policy would not normally permit but in doing so, lets people live in the countryside and support their business.
However, following the banking crisis and as a result of the subsequent recession, the banking industry has standardised mortgage products and there is less capacity now for solutions to particular circumstances such as croft houses. Recent discussions between the CNPA and the Council for Mortgage Lenders have indeed revealed that banks will not lend on a property under crofting tenure and will not lend on any association with a croft.
Planning committee convener Duncan Bryden said: “This is actually a national issue. Mortgages are much less available, lenders are more risk averse and there is a much greater onus on the borrower to ensure funds are secure before embarking on a project. These are not normally planning matters however this is an exceptional case and I support the planning officer’s recommendation to remove the Section 75 in exchange for a legally drawn up personal undertaking that this house will not be disposed of separately from the croft.
There is an ongoing need to support essential houses in the countryside, outside villages, while safeguarding the wider interests of the Park and the local community.”
The CNPA has pledged to continue to work – in partnership with the Scottish Government, lenders and other authorities – to find a solution that the banks will accept, whilst still being able to adhere to policies which have been put in place to protect the rural landscape. This issue is of national importance and any solution could be applied elsewhere in rural Scotland.
Don McKee, the CNPA’s Head of Planning explained: “The lender’s main concern is that they should have the ability to sell a property on the open market if there is a default on payments. The Section 75 at the moment does not allow for this and we have suggested to lenders the implementation of a ‘cascade’ mechanism which would allow the property to be sold to steadily widening categories of people until it could be sold on the open market at 20 weeks if no purchaser had been found.”
The planning committee voted 13-6 in favour of the removal of the Section 75 at this morning’s planning committee meeting in Aviemore.