According to Colonsay Community Development Company – the charity spearheading the project – nine new houses on the island will be ready for occupation by October this year.
Three self-build plots are also available, with prospective tenants for the homes or plots having until March 19 to apply.
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In addition, two commercial units are also being constructed with the hope of enhancing employment and business opportunities.
The project was funded in 2020 with the help of the Scottish Land Fund, Highlands & Islands Enterprise, Argyll & Bute Council and private industry partner Mowi, which allowed the charity to procure two sites in the port village of Scalasaig – one for housing and the other for business units.
Priority will be given to islanders who have left the community but are looking to move back.
However, with the island’s population having dropped to just 125 people, newcomers are also being welcomed.
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It has previously been reported that many people on the island are living in temporary homes or caravans due to the lack housing.
It follows calls from Salmon Scotland, the body representing Scotland’s salmon farming sector, for the Scottish Government to invest more heavily in housing in rural communities.
The body said that rising house prices and rent hikes were pricing people out of the market, with businesses reporting difficulties in recruiting enough staff.