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.”