Spike in HDB lease buyback applications

Blocks of housing flats in Toa Payoh on July 15, 2015.
Blocks of housing flats in Toa Payoh on July 15, 2015. ST PHOTO: JOYCE FANG

Close to half of them were from owners of four-room flats that became newly eligible

Applications for the Lease Buyback Scheme have surged after changes that make more households eligible and offer more flexibility kicked in this April.

Introduced in 2009 but updated several times since, the scheme lets elderly flat owners sell part of their lease back to the Housing Board for retirement income.

From April till September - the six months after the latest round of changes - 779 applications were received, the HDB said in response to queries from The Straits Times.

This was more than double the 368 applications received in the six months after the last time the scheme was updated, in 2013.

Close to half of the new applications were from owners of four-room flats. These 359 households became newly eligible for the scheme after April.

Previously, the scheme was for only three-room and smaller flats, covering 35 per cent of elderly HDB households. The latest change extended it to 75 per cent.

The monthly household income ceiling was also raised from $3,000 to $10,000 in April, and to $12,000 in August. Of the new applications, 60 were from flat owners who exceeded the previous $3,000 ceiling.

Other changes included offering a choice of the length of lease to be retained, provided the lease covers the youngest owner until at least age 95, and more cash upfront from the proceeds.

It normally takes about three months for an application to be processed. Of those who applied after April's changes, 251 households were successful.

Not all applications necessarily end with a buyback as the HDB has to confirm each household's eligibility and provide personalised financial counselling, to help applicants make an informed final decision.

One of those who have taken up the scheme is retiree Koh Sai Choo, 66, who applied in June after she became eligible.

The Tampines resident, who is not married and lives alone in a four-room flat, had planned to apply for a long time.

"I'm not working any more so it's good to have a steady income every month," she said in Mandarin.

Ms Koh, who had 68 years left on her lease, sold 38 years back to the HDB for about $200,000.

Of this, $147,000 went to her Central Provident Fund (CPF) retirement account, and more than $50,000 was paid out in cash. Her retirement account savings were used to buy a CPF Life plan, which provides her with a monthly payout of $761.

"It's a big help to me," said the former factory worker. "I get money every month and I don't have to move... I'm glad that I can grow old here."

A version of this article appeared in the print edition of The Straits Times on October 21, 2015, with the headline 'Spike in HDB lease buyback applications'. Print Edition | Subscribe