Iolaire cast off from Kyle at 7.30pm on Old Year’s Night. At half past midnight she was twelve miles from Stornoway where the armed drifter Budding Rose was waiting to escort her into harbour. At 1am the Captain and the lookout went below leaving Lieutenant Cotter on the bridge. Perhaps confused by the lights and apparently with no experience of entering Stornoway Harbour at night, the Iolaire was sailing too far east and just before 2am on New Year’s morning she struck the rocks at the entrance to Stornoway called the Breasts of Holm. There she foundered twenty yards from shore, broke her back and sank. 205 died, including the three officers.
Probably due to New Year celebrations on the Island response from the shore was slow. One Naval rating from the Iolaire managed to get ashore to the rocks with a line attached to a hawser which he wrapped around himself and brought forty men to safety. Thirty nine others survived the freezing water and reached the shore, the remainder perished. The findings of the subsequent inquiry were inconclusive.
At 1.55am, less than two hours into the New Year, HMS Iolaire suddenly shuddered to a halt as it struck the rocks at Holm. The boat listed heavily to starboard as a large wave crashed into her and lifted the stricken vessel further onto the rocks. As she began to sink, waves swept over the deck as between 50 and 60 men immediately opted to jump overboard and swim the 20 or 30 yards to shore. Unfortunately, this decision proved to be disastrous as none of them would succeed in this initial attempt at escape. Apart from hostile sea conditions, the night was as black as the tragedy itself. Some distress flares were fired into the night skies and a number of passengers suddenly realised that the vessel’s stem was within a few yards of a rocky ledge which extended to the shore. Some of those on board attempted to use this potential escape route but, unfortunately, many were drowned or perished as they were dashed onto the rocks by the uncompromising waves. Shortly after 2am, Lieut. Robert Ainsdale, the Officer of the Watch at Battery Point, reported to Admiral Boyle the initial sighting of a red distress flare from the direction of Holm.