Enhanced lease buyback scheme for HDB flats well received: Khaw

[reporter2]

http://www.businesstimes.com.sg/real-estate/enhanced-lease-buyback-scheme-for-hdb-flats-well-received-khaw

Enhanced lease buyback scheme for HDB flats well received: Khaw

MND reviewing studio, 2-room flat schemes to address some unhappiness over differences

By Lee Meixian

[email protected]@LeeMeixianBT

Jun 13, 2015


THE latest enhancements to the Lease Buyback Scheme (LBS), which took effect from April 2015, have been "well received", said Minister for National Development Khaw Boon Wan in a blog entry on Friday.

"Over two months, 450 households applied for LBS. If all are successful, this will be a 50 per cent increase over the 965 households currently participating under LBS," Mr Khaw said.

A total of 214 of the new LBS applicants are four-room flat owners and the other 236 own three-room or smaller flats.

Mr Khaw said: "They must have found the new LBS more attractive now."

The LBS allows the elderly living in Housing & Development Board (HDB) flats to use the tail-end of their flat leases to fund their retirement plan without leaving their flats.

In the latest enhancements to the scheme, the government extended it to four-room flats, and raised the income ceiling from S$3,000 to S$10,000.

It also offered varying leases and allowed households with two or more owners to get more upfront cash. The latter was on the premise of a relaxed requirement for a lower top-up to their CPF Retirement Accounts with the LBS proceeds.

From its study of the profile of the new applicants, the Ministry of National Development (MND) found that 32 (7 per cent) have monthly income exceeding S$3,000. Households with two or more owners also made up half the new applicants, compared to one-third of the existing LBS households.

LBS was launched in 2009. The government has since made several enhancements to the scheme based on public feedback.

Next up, Mr Khaw said, his ministry is reviewing the studio apartment and two-room flat schemes to address some public unhappiness on the differences between them.

The studio apartment scheme, introduced in 1998, offers shorter-lease (usually about 30 years) flats with elderly-friendly features and amenities, but are priced comparably with similar-sized 99-year-tenure two-room HDB flats.

Earlier in March, MND had said that it would study a new two-room flat scheme, offering varying lease tenures and terms to cater to the needs of different groups.

The studio apartment scheme began at a time when HDB had stopped building small flats, but since 2006, HDB has re-introduced new two-room flats.

The new scheme, if implemented, will unify the existing studio apartment and two-room schemes, MND said.

[reporter2]

http://www.straitstimes.com/archive/saturday/premium/top-the-news/story/more-home-owners-opt-hdb-lease-buyback-20150613

More home owners opt for HDB lease buyback

Nearly half of the new applications are from owners of four-room flats

Published on Jun 13, 2015 12:57 AM

By Janice Heng


INTEREST in the Lease Buyback Scheme rose after more households became eligible for it in April, with a total of 450 applications in April and May, according to a Housing Board statement yesterday.

This is almost half the existing 965 households on the scheme, which allows older HDB flat owners to sell part of their lease back to the Government for retirement income. Of the new applications, 214 - almost half - come from owners of four-room flats. Flats of that size were previously not eligible.

The rest of the applicants own three-room or smaller flats. "They must have found the new LBS more attractive now," said National Development Minister Khaw Boon Wan yesterday, in a blog post about the "good reception" of the enhanced scheme.

Extending the scheme to four-room units was one of the changes made in April.

The others were raising the income ceiling from $3,000 to $10,000, offering flexibility in the length of lease to be sold back, and allowing households with two or more flat owners to get more proceeds in cash upfront and less in Central Provident Fund top-ups.

Of the new applicants, 32 were newly eligible after the income ceiling was raised.

Half of all the new applicants are households with two or more owners, and will thus receive more cash upfront.

Mr Teo Hup Seng, 71, owner of a four-room flat, is keen on the scheme and did some research once he became eligible for it. But he and his wife, 68, will wait a little longer before they consider applying for it.

This is because the youngest flat owner must be at least 70 years old for the household to retain just 25 years of their lease, instead of 30, said Mr Teo.

"We want to retain just 25 years, so we get five years' extra cash."

Mr Liang Eng Hwa, deputy chairman of the Government Parliamentary Committee for National Development and Environment, said the greater interest was expected but added: "This is not a scheme where we measure its success by the numbers."

Instead, the scheme should be seen as another option for older home owners, in addition to renting out their flat, moving to a smaller unit or staying with their children.

"There are many options for them, and that's what we really want to achieve," he said.

The recent changes to the Lease Buyback Scheme have attracted more interest than previous ones. After they kicked in on April 1, 331 applications were received in April and 119 in May.

When the scheme was last enhanced in February 2013, just 127 applications were received in February and 83 in March that year.

Separately, Mr Khaw said in his blog post that the HDB is reviewing its studio apartment and two-room unit schemes "to address the frequent public feedback on the differences between them".

"Both flat types are identical in physical size but offer different terms to suit different clientele," he said. "We will see if the schemes can be restructured while continuing to serve our residents' needs."

[email protected]