The Arran Economic Group (AEG) wants to develop dozens of homes on the island that will be allocated according to economic rather than social need.

The group, made up of local business people and community activists, describe the island’s house prices are as unaffordable as London with the annual wage on Arran sitting at £24,000 – with house prices going for 10 times that figure.

The problem has been exacerbated by the number of properties used for tourists and bought by retirees pushing up prices and exacerbating the shortage of homes to rent.

The Scottish Government is considering a bid from the Arran Development Trust - a company set up by the AEG - for £8.5 million from its rural and islands housing fund to build 43 houses and supply 14 self-build plots, which will be prioritised for the island’s workforce.

Figures from North Ayrshire Council shows that in some areas 40% of homes are for holiday lets. Sliddery, on the south of Arran, has nearly half of its 73 properties as holiday homes.

It means local people are being forced to live on the mainland, driving out families who have lived on the island for generations with many now commuting to their jobs on the island.

Research shows that when properties are used for tourists or bought by retirees it pushes up prices and results in shortages of homes to rent.

Council leader Joe Cullinane said: “The AEG has shone a light on the situation on the island, which is probably one of the most extreme in the country and which is really quite staggering.”