SCOTTISH Borders Council is set to use some of the money it raises through its second homes tax on an affordable homes development. 

In 2016, the council doubled the amount of council tax that second homes pay, and set up a grant scheme with the money to fund community housing projects. 

In 2017/18 alone, the local authority raised an extra £611,881 from 1,316 homes, and currently has more than £1.5m in the fund. 

Now, the council’s ruling executive has voted to pump £13,000 towards the conversion of the Kirkhope Steading, near Ettrickbridge, into five affordable housing units. 

And there are plans for a business space at the site to support Ettrick Valley businesses. 

The £700,000 conversion of the steading is being led by the Ettrick and Yarrow Community Development Company, which hopes to acquire a £390,000 grant from the Scottish Government’s rural housing fund and a £306,000 loan, once planning permission is granted. 

The money from Scottish Borders Council’s second homes tax will be used to help facilitate the conversion, by paying for planning fees, building warrants and consultancy fees. 

At a meeting of the council’s executive committee on October 8, councillors were presented with a report by Brian Frater, the authority’s service director of regulatory services. 

The report states: “The Ettrick and Yarrow Community Development Company are exploring external funding applications to progress their ambitions to deliver five affordable homes for mid–market rent as part of a proposed mixed housing and business unit project via the conversion of the redundant Kirkhope Steading, Ettrickbridge. 

“The company has the opportunity to purchase the above redundant steading which is currently owned by a landed estate. 

“In 2018, the company commissioned the Rural Housing Service to carry out a feasibility study whose main aims were to undertake a housing need and demand survey and report, prepare a financial model to create a 30 year business plan based on the number of units, and complete the Rural Housing Fund application and advise on housing management options and allocations policy. 

“This study report concluded that there is unmet housing need in the study area, and current financial assumptions supported the viability of the proposed project to provide five homes, of two and three bedrooms.”

Welcoming the report, Mid Berwickshire councillor Mark Rowley said: “I support this. It’s a really innovative proposal and is the sort of model other rural communities could pursue, particularly in areas where the usual social landlords are reluctant to pursue this sort of more isolated development. 

“I’m entirely supportive of this and I particularly look forward to the other part of the proposal, which will see business space be allocated.”

Selkirkshire councillor Gordon Edgar added: “This will be a big benefit to the valley and the second part will be quite a good development for the area.”