Shorter leases among options mooted to help rental households buy flats

Former flat owners now living in rental flats may soon be able to buy 2-room Flexi flats with shorter leases with a second concessionary loan and a housing grant, National Development Minister Lawrence Wong said.

These are some of the ideas the Housing and Development Board (HDB) is exploring for the Fresh Start Housing Scheme, Mr Wong said in a blogpost on Tuesday (Dec 15).

A new housing grant will help these second-timer families by reducing the amount they need to pay, while a second HDB concessionary loan will help those unable to get mortgage loans. Under the scheme, 2-room Flexi flats – currently only available to the elderly – may be offered on shorter leases to make them more affordable, Mr Wong said.

The grant, however, may be disbursed in a few tranches, subject to certain conditions, instead of a single lump-sum payout, he said. These flats may also be subject to restrictions such as a longer Minimum Occupation Period.

The Ministry of National Development (MND) and the HDB are currently gathering views on the scheme through a series of public dialogues.

“Taken together, the provision of another housing grant, another concessionary HDB loan, and a shorter lease flat are significant steps to help these families,” Mr Wong wrote on the blogpost.

While some larger families may prefer to buy a bigger flat, it would be “more prudent” for them to secure a flat first, then move to a bigger unit when they are able to do so, he said.

“The 2-room Flexi-flats will be similar in size to their existing rental flats, but this will be a flat which they will pay for and will eventually be able to call their own, unlike a rental flat. This is the big difference.”


The public consultation also reached out to former public rental tenants who progressed to become homeowners. Many of them had support from friends, family, Government agencies and community organisations, Mr Wong said, adding that they had a “very strong sense of self-motivation”.

“They all agreed on the importance of securing regular employment, working hard, and putting their children through school, so that the problems do not continue with the next generation,” he said.

Still, this group felt the Government could provide additional support to the families who have not been able to buy their own flats – provided they show the commitment to put their lives and finances in order, Mr Wong noted.

“Given the complex issues families face, some may need more guidance and support before they can commit to homeownership,” he said. “So the number of Fresh Start families may not be large to begin with. But it’s better to start the scheme on a sound footing, and then see how it can be expanded over time to benefit more families.”

Source : Channel NewsAsia – 15 Dec 2015

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