A new range of mortgages to encourage the opening of community-owned shops has been launched by Silsden-based Ecology Building Society to help tackle the lack of services and isolation in rural areas.

The loans are available to organisations belonging to or receiving advice from the Plunkett Foundation, which supports the development of community-owned shops in the UK as around 400 villages shops close each year.

The Ecology will donate 25 per cent of the application fee for each mortgage completed to the Plunkett Foundation - enough to provide initial support to at least five fledgling community businesses .

The mortgage package is available to new or existing community shops on terms from ten to 30 years with tiered interest rates linked to the level of equity raised by the group. Lower interest rates are available for community shops that can demonstrate three years’ successful trading.

Paul Ellis, Ecology chief executive, said: ”Community shops make a vital contribution to building a more sustainable society, regenerating the local economy, increasing democratic control, reducing loneliness and even saving car journeys.

“We want to use our expertise in lending to co-operatives and community groups to help even more people to secure the future of their local shop.

Peter Couchman, Plunkett Foundation chief executive, added: ”We are very pleased to launch a dedicated mortgage for community shops in partnership with Ecology.

"A member of Plunkett, Ecology shares our goals and values by supporting a wide-range of community-led organisations that help regenerate local economies.

“This is a great offer for rural communities looking to buy their village shop, and, will help to fund start-up enterprises.”

According to the Foundation, around 140 new community shops have opened over the last five years and there is growing demand for lending tailored to the needs of community-led groups.