In Remote and Rugged Shetland, a Dynamic Market

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LERWICK, SHETLAND -- Across the Shetland Islands, an archipelago in the North Atlantic between the Scottish mainland and Norway, abandoned small stone houses are scattered around the windswept, almost treeless landscape.

The ruined homes -- a sight common in Scotland's islands, particularly in the Hebrides to the west of the mainland -- are the physical sign of the eviction of many crofters in the 18th and 19th centuries and, more recently, of residents' desire for modern homes with more living space.

But Shetland also contains a growing number of neat, timber-frame and timber-clad homes in the gray-blue and rust shades favored in Scandinavia. They nestle in prosperous communities linked by a superbly maintained road and ferry network paid for, in great part, by revenues from the North Sea oil industry and its port facilities in Shetland.

And more homes may have to be built soon: in 2008 the Shetland Islands Council set an informal target of 25,000 residents by 2025. (The results of a census in 2011 are not yet available, but the council now estimates that there are 22,500 people living on the 15 inhabited islands of Shetland's scores of islands, islets and barren rocks.)

The older public, commercial and residential buildings in the center of Lerwick, Shetland's diminutive capital of about 7,500 residents, are made of stone and resolutely Victorian in style. But it is the timber-clad houses that dominate the newly built clusters of homes on the outskirts of town.

"Most of these homes come in kit form from Scandinavia and cost from £100,000 to £180,000," or $160,000 to $300,000, said Nick Brett, an English architect working in Lerwick. "There is a strong culture of self-build in Shetland, even though building costs are about 25 percent higher than on the Scottish mainland."

Oil was discovered off Shetland in 1971; in 1975, work started on an oil terminal at Sullom Voe in the north of the biggest island in Shetland (which residents call the "mainland").

Thanks to an act of the British Parliament and a clever deal cut by the islanders, Shetland has received a cut of the value of each barrel of oil landed there. This money is controlled by the Shetland Charitable Trust, a body set up to administer, invest and spend royalties; there now is about £220 million in the fund, or about £9,800 for every resident.

The oil dividend has produced many unusual changes in addition to new sports centers and comprehensive support for the aged. For example, schoolchildren from some outlying islands routinely travel to their swimming lessons in Lerwick by small plane. And several years ago, when a Royal Air Force base closed on the northernmost island of Unst, eliminating some local jobs, the council decided to stop charging for the car ferry to the next island.

The colorful timber homes in Lerwick and in villages like Brae and Voe, near the oil terminal, may remind visitors not just of Norway, but also of Shetland's history: These islands were occupied by the Vikings in the 9th century and didn't become part of Scotland until the 15th century. Until the 19th century islanders spoke Norn, a now extinct Scandinavian language.

"Nobody thought that oil would have such a lasting impact," said Neil Henderson of the council's Economic Development Service, which tries to attract new businesses and residents to the islands. "For Shetlanders, oil has gone far beyond its expected life. And now we have new opportunities to profit from gas and wind power, as well as decommissioning oil rigs that are no longer needed."

Mr. Henderson said that Shetland's unemployment rate was only 1.5 percent, with fishing and fish processing also providing a lot of jobs.

Eric Peterson, a lawyer in Lerwick, describes the residential real estate market as "reasonably buoyant." In Shetland, it is lawyers, rather than the real estate agents who operate in most of the rest of Britain, and in England in particular, who routinely act as brokers.

"Most buyers are locals wanting to upgrade, oil sector workers or people finding work with the council," Mr. Peterson said. "Apart from large laird's houses, which tend to lend themselves to use as small hotels rather than single family homes, the top end of the market here for a house is around £400,000."

One of Mr. Peterson's offerings is a building lot with ocean views close to the village of Sandwick, 14 miles south of Lerwick, and listed at £25,000. It comprises 1,200 square meters, or about 13,000 square feet, the maximum size for most parcels without topographical problems.

In spite of the open space on much of Shetland, strict rules apply to newly built homes, partly because much of the land is still worked as crofts, the traditional landholding system used in the Highlands and islands of Scotland.

"The cloak of crofting floats over the land," Mr. Peterson said. "In many locations, if you want to build a home you need first to apply to the Crofting Commission in Inverness for the land to be 'de-crofted."'

Neil Risk, another lawyer, is representing the seller of a timber-frame house in East Burrafirth, some 22 miles from Lerwick. The property, offered at £142,000, has three bedrooms, each with its own bathroom, and a separate garage.

Despite its challenging weather conditions and relative isolation, Shetland does have an appeal to foreigners. As Silke Reeploeg, a German resident, said: "When you're in Shetland, you always know you're on an island. It feels remote, too."

Ms. Reeploeg and her Argentine husband spent several years between Shetland and Tierra del Fuego, the southernmost point of Argentina, before moving permanently to Shetland in 2000. They now live in a restored croft house on the island of Bressay, a short ferry ride from Lerwick.

"There are similarities between Tierra del Fuego and Shetland," said Ms. Reeploeg, who is a researcher at the Shetland Center for Nordic Studies and a tourist guide. "There is a frontier mentality here. People are self-reliant but they are friendly to outsiders, too, and there's a strong sense of place."

The council's Web site includes 12 profiles, Ms. Reeploeg's included, of residents who came from Thailand, New Zealand, elsewhere in Britain and beyond.

Mr. Henderson says the stories are an imaginative way of explaining to potential home buyers what might lie ahead. "People can see that we have become a rich, cosmopolitan society," he said.

Or, as Ms. Reeploeg recalled: "It was strange when I learned to drive in Shetland. There I was, a German, being taught by an instructor from Iceland."

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This article originally appeared in The New York Times.


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