National Islands Plan Annual Report 2025

Housing

Strategic Objective 4 – Improve housing

Commitment 4.1 Ensure that Housing to 2040 truly reflects the distinct needs of island communities.

Commitment fulfilled.

This commitment was fulfilled in 2021. Please see the National Islands Plan 2021 Annual Report for further details.

Commitment 4.2 Ensure that the regulation of short-term lets takes account of the unique circumstances of island communities and make special provision for them where required.

Commitment fulfilled.

This commitment was fulfilled in 2024. Please see the National Islands Plan 2024 Annual Report for further details.

Commitment 4.3 Explore how the Rural and Islands Housing Fund might be adapted in the future to expand the range of options to support housing development in remote and island communities.

Commitment fulfilled.

This commitment was fulfilled in 2020. Please see the National Island Plan 2 021 Annual Report for further details.

Commitment 4.4 Continue to provide grants to crofters to build and improve croft houses.

Commitment fulfilled.

This commitment was fulfilled in 2020. Please see the National Islands Plan Annual Report 2020 for further details.

Commitment 4.5 Make best use of all housing stock including derelict properties and options for compulsory purchase.

Commitment fulfilled.

This commitment was fulfilled in 2025. In September 2025 the Scottish Government provided an update to the Scottish Parliament’s Local Government, Housing and Planning Committee, confirming that it has completed commitments on empty homes outlined in the Housing to 2040 Strategy.

We continue to support and fund the Scottish Empty Homes Partnership which has helped bring nearly 13,000 empty homes back into use since 2010, with a record breaking figure of just over 2,000 homes in 2024-25 (510 of these were located in island authority areas).

The Scottish Government is taking forward a comprehensive programme to reform and modernise Scotland’s compulsory purchase system, with the aim of making it simpler, more streamlined and fairer. A substantial consultation on proposed reforms to compulsory purchase was published in September and closed on 19 December 2025. This also included questions seeking views on compulsory sales and lease orders. We are currently analysing the responses and will use the feedback received to inform next steps.

In June 2025, the Cabinet Secretary for Housing wrote to the Scottish Parliament’s Local Government, Housing and Planning Committee to provide a further update on the implementation of short-term let licensing in Scotland, which included reference to which local authorities are exercising their powers (or exploring proposals) to designate short-term let control areas with the aim of managing high concentrations of short-term lets.

Commitment 4.6 Improve access to homes for people looking to settle in, or return to, island communities. In collaboration with local authorities and relevant stakeholders, we will examine the full range of options to do this, making best use of our existing homes and new supply.

Implementation of the Rural and Islands Housing Action Plan remains a priority for the Scottish Government and supports the delivery of the 110,000 affordable homes target, of which at least 10% will be in rural and island communities.

The demand-led £30 million Rural and Islands Housing Fund continues to play an important role in helping community organisations and others to deliver affordable homes, while complementing delivery through our mainstream programme by local authorities and housing associations in rural and island areas.

In the Programme for Government 2025-26 we extended applications to the Rural and Islands Housing Fund to March 2028.

The Scottish Government is making available up to £25 million from our affordable homes budget up to March 2028 on a demand-led basis for the Rural Affordable Homes for Key Workers Fund to enable local authorities and registered social landlords to provide affordable homes for key workers where there is identified need.

Through the Rural Affordable Homes for Key Workers Fund we have approved 39 homes, 16 of which are on islands.

The Cabinet Secretary for Housing published the Housing Emergency Action Plan on 2 September 2025. Working closely with public bodies, landowners, and the Scottish National Investment Bank, we will support the delivery of more homes in island communities to unlock land, build delivery capacity, and develop a pipeline of investment opportunities.

In February 2026, the First Minister announced the Scottish Government’s intention to introduce a new Rural and Island Housing Grant Scheme, with up to £20 million available over four years. The development of this new grant scheme will be taken forward with rural, island and housing partners and will form part of a wider package of work to support the development of the new housing agency – More Homes Scotland.

The Scheme will be open to individuals to help meet the cost of securing a permanent home, and is expected to provide support to first time buyers, families, rural and island returners, among others to help them access affordable owner occupation in the communities of their choice. The Cabinet Secretary for Housing will provide a further information to the Scottish Parliament on the development of More Homes Scotland in March 2026.

Commitment 4.7 Ensure that the impact on Gaelic-speaking communities is considered as housing policies are developed.

Through the new Tog action group, the Scottish Government is working with local authorities, public bodies, and private enterprise to consider the housing requirements of Gaelic-speaking communities. This involves assessing the impact of existing policies and ensuring that future measures benefit the language.

The Scottish Languages Act introduces a power for local authorities to designate Areas of Linguistic Significance. Such designation will intersect with wider planning policy within any community so designated. This will ensure that the language’s requirements are heeded in the course of developing housing policy.