Proposals to build affordable housing in three of Argyll and Bute’s rural communities have been given a major financial boost.

Argyll and Bute Council today agreed to award grants totalling nearly £1million to schemes in Ardfern, Iona and Islay.

The news was welcomed by Councillor Robin Currie, Argyll and Bute’s spokesperson for rural and island affairs, housing and Gaelic.

“In November last year, we agreed to establish a Rural Housing Development Fund (RHDF) of £750,000 with the aim of addressing local housing needs and stimulating regeneration in some of our more rural areas,” he said.

“I am delighted that just four months later, we have agreed funding which will enable 17 new properties to be built in these fragile rural communities – 16 for rent and one shared equity – at a total development cost of nearly £2.3m.

“Argyll and Bute has an acute shortage of affordable housing, and just a handful of new houses can make an enormous difference to the sustainability and success of small, remote communities.

“I look forward to seeing these developments in Ardfern, Iona and Port Ellen on Islay take shape on the ground, and very much hope that this is just the start of a period of sustained financial support for new affordable housing across our rural areas.”

Bids for the first tranche of funding from the new RHDF were invited for submission by February 6 for development proposals in Ardfern, Iona, Port Ellen, Strachur, Succouth and Tiree.

The seven bids received, which had a total value of £2.465m, were all evaluated before funding recommendations were made.

Value for money and affordability was key to the assessment criteria. Among other things, the new housing must also:

• Meet affordable housing need in the area
• Meet the Scottish Housing Quality Standard
• Be affordable to applicants in the lower income quartile
• Begin development by September 30 2012

The three successful bids were ACHA’s plan for four three-bedroomed houses and four two-bedroomed flats at Leodamus Place in Port Ellen (total bid from RHDF of £479,865), Fyne Homes’ submission for four two-bedroomed flats and two three-bedroomed houses in Ardfern (£293,667) and Iona Housing Partnership’s proposal for two two-bedroomed properties and one three bedroom house on Iona (£180,000).

The total development costs of these three schemes is £2,281,346.

The remaining four bids submitted did not meet the RHDF criteria.

The three successful submissions together add up to £953,532 – some £203,532 more than the initial sum contained within the RHDF.

The council’s Executive today agreed to contribute this additional sum to the RHDF from the Strategic Housing Fund balance, which currently stands at £5.7million. This will allow the developments to proceed, subject to the usual planning and other approvals.