News / SIC loans could kick start house building
SHETLAND Islands Council is stepping in to help private sector housing developers with bridging loan finance after high street banks were alleged to have abandoned the sector.
Councillors heard on Wednesday that the move should “kick start” the private housing sector in the isles again, after access to finance had almost entirely dried up.
The council’s development committee unanimously agreed to commit funds towards the new scheme, which will benefit private developers but is not designed to help individuals build their own homes.
Under the scheme, up to £300,000 could be made available as a bridging loan to enable businesses to develop housing sites or small housing estates.
Interest charged will be in line with high street bank rates, but the repayment period would be limited to three years and be triggered when the site or buildings were sold.
Head of economic development Neil Grant said it was necessary for the council to step in until the banks were “willing to do business again.”
Some councillors expressed concern that the finance on offer was not available for single house developers, but agreed with the need to act in order to satisfy the “strong demand” for private sector housing in Shetland.
Committee chairman Alastair Cooper said: “This is an attempt to kick start the private house building sector again and to help the construction industry.”
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