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Post Office to rethink island mortgage ban branded unfair

The Post Office is reviewing its little-known ban on giving mortgages to those buying homes on Scottish islands after it was condemned as discriminatory.

People applying for home loans on Skye - linked to the mainland by a bridge - are the only island borrowers exempt from the ruling by the publicly owned company.

The Post Office is now reviewing the policy which has stood since 2009. It is understood to result from a perceived a shortage of qualified surveyors in the islands.

Independent Highlands and Islands MSP Jean Urquhart hopes for change after raising the ban with UK consumer affairs minister Jenny Willott and Post Office managing director Paula Vennels.

She became aware of the problem after getting a letter from a constituent who would be ineligible. The Post Office has also now agreed to reconsider that case.

The independent MSP said: "The local post office plays an absolutely central role in many rural communities, including in the islands. I would hope that relationship could extend to all of its services.

"When we have been so failed by the banks, a diversity of ­financial services providers is to be welcomed. Islanders should be able to benefit from that greater choice the Post Office provides.

"There's no obvious justification for discriminating against the islands in this way.

"My hope is that this is an oversight by a distant official, and that the Post Office will quickly agree to scrap its 'no island mortgages' rule."

Stephen Omand, a surveyor on Orkney, dismissed any suggestion that a lack of surveyors on the islands could justify the Post Office's policy.

He said: "I have been a qualified surveyor for 34 years, self-employed since 1990.

"There is no problem at all getting surveyors here who can do valuations within days.

"The problem has been that, particularly since the recession, some of the lenders find it difficult to understand that there are qualified surveyors in Orkney, Shetland and the Western Isles."

He said he knew of lenders flying surveyors up from Aberdeen or Glasgow to the islands.

Jacqui Smith of Anderson and Goodlad ­Solicitors and Estate Agents in Shetland's capital Lerwick, said "It is true that there is a delay in Shetland because there are only two surveyors who are qualified to do valuations or home reports.

"You are looking at roughly four to six weeks of a wait. But the market is pretty buoyant with all the work at Sullom Voe."

The Post Office began lending in conjunction with Bank of Ireland UK, but it makes it clear that there are restrictions to properties it will lend for.

It lists its lending areas as "England, Scotland (not Scottish Isles with the exception of Skye), Wales and Northern Ireland (unless otherwise stated)."

Ms Urquhart has written to Liberal Democrat Ms Willott, the minister responsible for the Post Office, and to Ms Vennels.

A Post Office spokesman said the organisation was "committed to serving customers across the whole of the UK." He added: "We strive to provide the best possible service to people in remote areas such as the Scottish Islands.

"We regularly review our ­policies and are currently considering how greater mortgage availability could be delivered in the Scottish Islands.

"This would be subject to resolving the wider issues we have encountered, particularly with regard to the supply of valuations. In the meantime, we would be happy to reconsider this individual customer's application."

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