Clarification for Crofters Seeking a Mortgage

mortgageLocal MSP Maree Todd, SNP has welcomed the decision by Fergus Ewing,Cabinet Secretary for the Rural Economy and Connectivity in the Scottish Government,  to write to the Royal Bank of Scotland urging them to give fair mortgage offers to crofters.

Currently, those in receipt of the Croft House Grant scheme 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 Skye MSP Kate Forbes, SNP.

Kate Forbes said:

“I was really concerned that two of my constituents were unable to secure mortgages because they were receiving Croft House Grant assistance.

“It is highly likely that there are others like them who have been denied a bank mortgage because of a misplaced perception about what happens in the event of insolvency.

“The Croft House Grant scheme is really beneficial for crofters across the Highlands and Islands, and it would be deeply unfortunate if anything undermined that progress.

“I wrote to Fergus Ewing because I thought it was ridiculous that people couldn’t secure a mortgage for a technical reason like this.

“I am delighted that Fergus Ewing has intervened and clarified that there is no reason for banks to refuse mortgages simply because of the Croft House Grants.”

Maree Todd added:

Maree Todd MSP

Maree Todd MSP

“This is a really good outcome for crofters that I represent in the Northern Isles.

“Folk in my region may have been denied a mortgage because of this misplaced conception from RBS.

“I hope that this intervention by the Cabinet Secretary will prevent any of my constituents being unfairly denied a mortgage in the future.

“Well done to my colleague Kate Forbes for pursuing this case on behalf of her constituents and to Fergus Ewing for his intervention.

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. 

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