Building a New Croft House

Building a new croft house is an expensive and exciting project, and is a topic I regularly advise on.

It can be tricky to determine the order in which the various processes must be undertaken, and I hope that this short summary is helpful.

A potting shed project rather than croft house – Not eligible for the CHGS!

1. Design house

You may also, at this stage, wish to identify a builder who can work to your timescale.

2. Obtain planning permission

Although s. 75 agreements are still used as a mechanism to secure planning obligations, they are not now commonly used to tie houses to land in rural, agricultural and crofting areas. Indeed, I am aware of several cases where local authorities are discharging subsisting agreements on request.

This is great news because s. 75 agreements were affecting not only a crofter’s ability to reclaim VAT paid in relation to a new build croft house, but they were also limiting the crofter’s ability to obtain a mortgage for building a new croft house.

You must have obtained at least planning permission in principle before you progress to apply to the CHGS, or to decroft.

3. Apply to the Croft House Grant Scheme

The Croft House Grant Scheme (CHGS) is one of the two crofting-specific forms of financial assistance (the other is the Crofting Counties Agricultural Grant Scheme, or CCAGS).

The CHGS was revised in 2016 and now provides a grant for building a new croft house of £28,000 in standard priority areas, and £38,000 in high priority areas. There are also grants available for rebuilding and improvement of existing croft houses.

You can click here for a map showing the two areas, and here for the full guidance published by the Scottish Government.

Only tenanted or owner-occupied crofts are eligible for the CHGS. Crofts which have the defective “vacant” status cannot be the subject of an application. For more information on the these “cursed” crofts, see my article from last September here. There are, of course, many other criteria which must be fulfilled before an application is competent.

4. Decroft the Site of Your New House

Your decrofting application will proceed under the Commission’s ‘part croft’ procedure, rather than the ‘croft house and garden ground’ route – even if there is no other croft house and has never been one. A ‘croft house and garden ground’ must be an existing structure, not a prospective structure (and must be wind and water tight and fit for human habitation).

This is a shame because the croft house and garden ground is much quicker (4-6 weeks) than the part-croft route (12-16 weeks), but unless you can afford to proceed with building a new croft house without mortgage finance, decrofting will be necessary.

For owned crofts, you can find the Commission’s application form here and the guidance notes here.

For tenanted crofts, those pages can be found here and here respectively.

It was previously necessary to apply to receive approval from the CHGS before applying to decroft. This made for an extremely tight timescale, because the usual allowance was one year between approval of an CHGS application, and the requirement to have the house wind and watertight. Decrofting ate up at least 5.5 months of that year, which meant having to build to wind and watertight within 6.5 months, which in most cases was simply not practical.

Happily, this part of the CHGS has now been revised and it is now possible to decroft before or after receiving your CHGS decision.

5. Purchase the Decrofted Site (for tenant crofters only)

If you are a tenant crofter, you will, once you have obtained a decrofting direction, require also to purchase the same area from your landlord.

It is important to ensure that you accept no liability (a) to pay your landlord any sum if you sell the land (aka landlord’s clawback) OR (b) to lease the sporting rights. Either of these would be problematic when you come to apply for a mortgage

6. Apply for a mortgage (if you are using one)

Self-build mortgages were particularly badly affected by the financial crash in 2008, and at that time most, if not all, such products were withdrawn. Although there are now some self-build mortgage products available, you may need to shop around to get the best deal and structure for you.

7. Build your house

If you are planning to build a new croft house, or if you need help with any crofting matter, drop me an email (eilidh@camus.scot) or call me on 07876 513404.