A place to call your own, no matter how modest, is a basic need, yet a generation is growing up on the island of Arran with slender hope of ever achieving this. The island's picture-postcard villages and beautiful empty spaces conceal an increasingly desperate homeless situation, with adults still living with their parents into their thirties and forties, families living in caravans or moving between several short-term lets every year. In terms of the proportion of its residents in search of homes, the island has the worst housing waiting list in the UK.

Kenny Ross has a laid-back attitude to life, which is probably just as well. He has been living in an old caravan in the back garden of a terraced house in Brodick for the past seven years. "I can see daylight through the floorboards, " he says with a wry smile. "During heavy rain it's like having a thousand snare drums on the roof." The caravan, which is sandwiched between two houses, has seen better days. Kenny's entire life is crammed into its tiny space.

Despite all the scenery on his doorstep, Kenny doesn't have a garden, something he would love. While he has a good relationship with his landlord, he admits it isn't the ideal set-up. "It does feel intrusive having to walk through someone else's garden to get to the caravan." He is unsure of what the future holds should they ever decide to sell up.

Kenny's family moved to Arran when he was six months old and he moved out of the family home to rented accommodation in his thirties. Now aged 41, he has worked at the local sawmill for most of his adult life and volunteers with the Arran Mountain Rescue Team. He is philosophical about his predicament. "Arran has everything I want. The longer you stay, the harder it is to leave." His dream is to have a secure home before he retires.

Kenny's situation is not unusual on Arran. Described as Scotland in miniature because of its gently rolling fields to the south and dramatic peaks to the north, the island also represents a microcosm of Scottish society in terms of the housing situation. Invisible homelessness in Scotland's islands and tourist areas is becoming more dire. On Mull, around a fifth of the island's population lives in temporary accommodation.

Rising house prices across the country have made getting on to the property ladder a near-impossible task for first-time buyers. In communities where many are employed in low-paid jobs in the hospitality and tourist sectors, the odds against buying a home are even higher. Karine Stewart, 50, was born and bred on Arran; she lives in Blackwaterfoot and works as a photo lab operator in Brodick. Her home for the past five years has been a caravan in her brother's garden.

"I was made homeless for about four months with two children when my son was in the middle of his Highers," she says. "That was difficult. The council doesn't have a homeless policy, so if you are desperate for a house they will house you but it will be on the mainland so you would have to give up your job."

Karine and her family were initially taken in by a cousin who owned a hotel before moving among several cottages for a month at a time before moving on to her brother's land. Karine replaced the old caravan with a mobile home and believes it is the closest she will come to having her own house. "My brother is disabled so it is handy for me to be next door to him. I could never afford to buy here and there is no hope for my children being able to buy here," she adds.

Like the 25% of the island's population who live in rented accommodation, Karine is familiar with the difficulty of competing with holiday-makers for rented houses. "You can get a winter let easily enough but when it comes to the summer you haven't anywhere to go. Once you find a long term let, it's not so bad. Although, I was in a long-term let for three years when the woman who owned the house wanted it back and that's when I became homeless."

Clare Callaghan, 23, originally from Hertfordshire, has lived in four different lets in four years. She currently stays in a long-term rental in Lamlash. "My partner works in a hotel and is not well paid. I would love to stay on Arran but he is fed up with continually having to move and doesn't see how we can stay."

According to the 2001 census, the number of permanent residents on Arran is 5058. Of this, some 902 (18%) are under 16 and 1533 (30%) are over 60. While jobs are relatively plentiful on the island, the lack of affordable housing means that people of working age, including teachers and health professionals, have to resign themselves to a lifetime of unpredictable rentals.

Henry Murdo moved to the island in the 1960s, aged 15, and is outraged by the struggle for accommodation. "Arran has the biggest housing waiting list in the British Isles, per head of population," he says. "There are around 270 applications on the official list but we know that there are probably in excess of 500 and this is the working population of the island. This problem has been growing as house prices have gone up along with the lack of land for building. The tradition of building your own house died on its feet with these new planning regulations, which do not allow any new building outwith the villages."

Henry is one of a group of concerned individuals behind the Housing Initiative for Arran Residents (Hifar), recently set up to address the housing crisis on Arran. The group aims to provide low-cost, sustainable housing, complementing the work of the housing association Isle of Arran Homes, set up in May 2001 to provide social rented housing. In addition to the housing stock of 118 houses inherited from North Ayrshire Council, the association has built 52 new houses across Arran.

Manager Andrew Martin says: "The difficulty is that we have limited accommodation for renting and we are constrained by the new building regulations and this will get increasingly difficult as the last piece of land designated for new building has been used."

Last week Eileen Griffin, 42, reached the top of the housing list and moved her family into a newly-built Arran Homes house in Brodick. After the birth of her second child two years ago, she put her name on the transfer list to move from a two to a three-bedroomed house. She says: "I am absolutely delighted, but I realise how lucky I am. I knew what the waiting list was like but all you can do is hope. I had visions of us sharing our bedroom with a five-year-old boy."

If finding rented accommodation is a challenge, then being able to buy a home is a dream too far for many residents. In 2000, the average price of a house on Arran was £86,010, compared to a national average of £74,000. A mere five years later the island average was £198,580 (national average £148,060). This sharp rise in prices has excluded many who would have been able to buy, while the new planning regulations restrict those who want to build their own home. It is these people whom Hifar is particularly concerned about.

"Arran Homes does an excellent job in providing social housing for people who could never afford their own house," says Henry. "I'm talking about people who could ordinarily afford to buy their own house, but houses now are priced for millionaires. Previously, if you wanted to get planning permission you went to see the local councillors who were local people who know you and they would bend over backwards to help all the young people. Now it's the complete opposite. We don't know who the councillors are, they don't know us or the type of community we live in. Since Arran councillors opted to split from Bute, we have gone into an urban situation and got lost in that."

Another strain on the housing stock is that 42% of the houses are holiday homes. Kirsty Innes, 30, lives in Lochranza, which has the highest percentage of holiday homes on the island. She is married with five children under 13 years of age, and her family is one of only five in the village. She recently swapped homes with her parents-in-law who had a larger house. "We've been very lucky, if we didn't have this house we would have had to leave the island which would have been very hard."

"Already, it's very hard for my kids because there are not many other children here. You want them to socialise with as many people as possible. When I hear that a house has been bought as a holiday home I think it's a shame. In summer you see plenty of people about, but in winter it's just depressing."

However, most residents agree that tourism is the lifeblood of the island and the housing problem is not purely the result of holiday homes. "It's more complex than that." says Murdo. "The most remarkable thing about the Arran people is that they are not resentful - they are very welcoming and always have been. It's a very tolerant community and that's something which has grown up over generations and we want to preserve that. It's a fantastically valuable thing and 20 years from now there will be no-one like that left here because none of us can afford to live here and that will be gone for ever."

marisa.duffy@theherald.co.uk