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Lease Buyback vs Equity Release

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Lease Buyback vs Equity Release

Postby Barnsley » Mon, 01 Sep 2014 3:29 pm

I have been reading that the Govt is pushing HDB lease buyback.

What is the difference between this and "equity release" schemes in the UK?

Are not both effectively extra loans taken against the value of the home?

I am probably misunderstanding but both systems look to need the house prices to stay high otherwise the ones "helping" to release the equity or pay for lease are gonma be seriously out of pocket are they not?
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Postby JR8 » Mon, 01 Sep 2014 5:02 pm

Do you have any links re: this scheme?

Wld make it simpler to consider.
Last edited by JR8 on Mon, 01 Sep 2014 6:17 pm, edited 1 time in total.

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Postby PNGMK » Mon, 01 Sep 2014 6:13 pm

IT's a reverse mortgage system as I understand it.

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Postby Mi Amigo » Mon, 01 Sep 2014 6:18 pm

Interesting, so the idea would be that people use their CPF funds to buy an HDB, and then take out a mortgage secured on the property, is that right? That might somewhat placate those who are screaming for the gahmen to 'give us our CPF money back', but surely it would further jeopardise the retirement income of those who took out one of these 'equity release' loans?

Or is it intended for older people who want to stay in their homes but don't have enough CPF savings to pay their bills? In which case their children might be miffed that they won't inherit the HDB flat.

Or maybe I've misunderstood the whole rationale behind this.
Last edited by Mi Amigo on Mon, 01 Sep 2014 6:20 pm, edited 1 time in total.
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Postby Barnsley » Mon, 01 Sep 2014 6:18 pm

JR8 wrote:Do you have any form of this re: this scheme?


I understand the lease buyback is that the Govt will pay for the remaining years of the lease. Its only available to folks passed retirement age from what I have read.

http://www.hdb.gov.sg/fi10/fi10325p.nsf ... enDocument

I guess as the Govt still holds the freehold to the HDB residence then maybe this is more straight forward and less of a minefield for the "beneficiary" as an equity release scheme whereby it could end up causing some issues as that is a loan/mortgage that ultimately has to be paid back.
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Postby PNGMK » Mon, 01 Sep 2014 6:39 pm

Once again, more proof that a HDB flat is not 'property' as far as I am concerned.

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Postby JR8 » Mon, 01 Sep 2014 7:28 pm

PNGMK wrote:Once again, more proof that a HDB flat is not 'property' as far as I am concerned.


Australia being 10,000+ times larger than Singapore, maybe you're not aware of the legal ramifications of multi-storey/leasehold living? Maybe you don't know that even with 'freehold' land, you, don't actually own it? It's all just levels of temporary tenure...

Looking at the scheme. It's aimed to allow elderly HDB owners to release equity from their homes.

They sell their ownership and get granted a lease in return. If you're hard up and have no heirs then why not.

Cute here though, you don't get cash in hand, rather, it gets put in your mythical and mystical CPF pot-of-gold.

--- Imagine this Disney-hell scenario, where CPF goes tits-up... after all, it is apparently run by a tight little inner-circle....

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Postby PNGMK » Mon, 01 Sep 2014 7:45 pm

JR8 wrote:
PNGMK wrote:Once again, more proof that a HDB flat is not 'property' as far as I am concerned.


Australia being 10,000+ times larger than Singapore, maybe you're not aware of the legal ramifications of multi-storey/leasehold living? Maybe you don't know that even with 'freehold' land, you, don't actually own it? It's all just levels of temporary tenure...

Looking at the scheme. It's aimed to allow elderly HDB owners to release equity from their homes.

They sell their ownership and get granted a lease in return. If you're hard up and have no heirs then why not.

Cute here though, you don't get cash in hand, rather, it gets put in your mythical and mystical CPF pot-of-gold.

--- Imagine this Disney-hell scenario, where CPF goes tits-up... after all, it is apparently run by a tight little inner-circle....


I've always been aware that title is only as secure as the government behind it (cue all the miserable tales of expats losing land they thought was title in Thailand as the new government reviews all titles!).

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Postby JR8 » Mon, 01 Sep 2014 8:32 pm

PNGMK wrote:I've always been aware that title is only as secure as the government behind it (cue all the miserable tales of expats losing land they thought was title in Thailand as the new government reviews all titles!).


Well yes, but that hasn't been a concern in the UK for 1,000 years.

More to the point if you '''own''' land in Australia, er, actually the Queen owns it, and you just have a temporary though heritable right to occupy it. Die intestate, and it goes straight back to Aunt Betty.

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Postby PNGMK » Mon, 01 Sep 2014 11:30 pm

JR8 wrote:
PNGMK wrote:I've always been aware that title is only as secure as the government behind it (cue all the miserable tales of expats losing land they thought was title in Thailand as the new government reviews all titles!).


Well yes, but that hasn't been a concern in the UK for 1,000 years.

More to the point if you '''own''' land in Australia, er, actually the Queen owns it, and you just have a temporary though heritable right to occupy it. Die intestate, and it goes straight back to Aunt Betty.


True. I love thought how people who don't think these things go on about 'it's my property' or 'it's our country' - without thinking through that the idea of ownership requires cooperation and trust from your community. Just look at how ISIS are destroying property rights in Iraq and Syria.

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Postby JR8 » Tue, 02 Sep 2014 12:32 pm

PNGMK wrote:True. I love thought how people who don't think these things go on about 'it's my property' or 'it's our country' - without thinking through that the idea of ownership requires cooperation and trust from your community. Just look at how ISIS are destroying property rights in Iraq and Syria.






The concept... per Wiki...
http://en.wikipedia.org/wiki/Queen's_Remembrancer

Bona vacantia (Latin for "ownerless goods") is a legal concept associated with property that has no owner. It exists in various jurisdictions, with consequently varying application, but with origins mostly in English law.
It dates back to Roman law which explains the Latin name!
http://en.wikipedia.org/wiki/Bona_vacantia

'‘Bona Vacantia’ means vacant goods and is the name given to ownerless property, which by law passes to the Crown. The Treasury Solicitor acts for the Crown to administer the estates of people who die intestate (without a Will) and without known kin (entitled blood relatives) and collect the assets of dissolved companies and other various ownerless goods in England and Wales.'
https://www.gov.uk/government/organisat ... a-vacantia

-----

One time we had a renegade freeholder, that we were just about to take to court. The freehold title of the building was owned by a shell company of his. Rather than face court, where he'd have been questioned on his 100+ other shell companies holding freehold titles, he simply dissolved the one related company, despite the freehold title being worth quite a lot (maybe £30-50k?).

The leaseholders at that point hadn't a clue how to proceed, but we were rather relieved (and somewhat amused) to end up buying the title back, for a nominal sum, 'from the Queen' :lol: :cool:

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Postby PNGMK » Tue, 02 Sep 2014 1:42 pm

I love these old rules. Unfortunately colonies such as Singapore and Australia try to remove them from their law books.

Did you know that it was only a few years ago Singapore still had cases of law going on over adverse possession? Even though it was removed from the law books over two decades ago, a property owner successfully established an adverse possession title on a corner of his neighbors property as the area had been fenced into his side for decades.

Singapore still has penny leases between private individuals that were set up over 50 years ago and are still valid (much to the chagrin of the land owners!).

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Postby JR8 » Tue, 02 Sep 2014 4:52 pm

It was pretty amusing. The elderly father of one of my neighbours there had the time and inclination to deal with some of the correspondence which helped a lot. When he later twigged he was now dealing with 'The Crown' his letters went from being signed off simply 'Yours faithfully' to, 'I remain Sir, your humble and obedient servant'... :lol: *

Adverse possession (> fencing off a piece of land, and if unchallenged after 12 (IIRC?) years it's yours)). That's an ancient law, literally, and IIRC it's tied in to Squatters Rights...


* There's an expression in England, roughly, 'Getting a whiff of the ermine'. Example: 'Since Eric got a whiff of the ermine, he's been behaving like he's a Grand-Duke himself!'

Ermine being a fur used on Royal robes. And how people 'brushed' by Royalty, even just an acknowledgement to some letter written in to them, often suddenly feel socially elevated themselves...


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