KUALA LUMPUR (May 15): Maybank Islamic Bhd’s HouzKEY, Malaysia’s first bank-initiated rent-to-own (RTO) scheme, will launch its second phase which will see the scheme being expanded to cover properties on the secondary market.
Sally Lye Saw Im, managing director Real Estate Ventures Group Global Banking of Maybank, told EdgeProp.my that phase two of the programme, which will be introduced tomorrow (May 16), has attracted the participation of at least 200 real estate agents, who discovered the scheme via the Malaysian Institute of Estate Agents.
In phase two of HouzKEY, Maybank Islamic will enhance its role to streamline the property transaction process and effectively link real estate agents with buyers.
Real estate agents who are interested to participate in the scheme can submit the relevant documents related to the property to Maybank Islamic which will then assess the property ownership status and valuation.
When approved, Maybank Islamic will publish the property listing on the Maybank2Own HouzKEY web portal.
Interested buyers can request to view the property and submit applications online to enter into an RTO scheme for the property if they intend to own it.
It will take about 24 hours to assess the applicant’s eligibility. If approved, the applicant will be able to sign the RTO agreement the next day to rent/own the property.
In this process, the property is considered sold to Maybank Islamic under the HouzKEY scheme.
Lye said the HouzKEY process remains the same as in phase one and the bank is stringent in assessing applicants’ eligibility for the scheme, which is limited to first-time homebuyers or property owners who already own one property and are looking for a second property for upgrading purpose.
Successful applicants may move into the home after paying three months’ rental deposit.
“The objective of HouzKEY is to help customers to own a house without having to pay the down payment with all of their savings, this could minimise the upfront cost of owning a house,” she stressed.
Lye estimated that to own a home, be it on the primary or secondary markets, one needs to fork out about 15% to 25% of the total property value as down payment and other transaction costs such as legal fees and stamp duty.
Many young wage earners, especially those currently renting their homes, struggle to save such a huge sum of money, she added.
Unlike normal mortgage loans which only have a loan margin of 90%, the HouzKEY scheme offers 105% of loan margin to successful applicants, which covers the down payment and other transaction costs.
The individual will be given an option to either purchase the property after renting it for at least one year at a pre-determined price, continue to rent, or sell the property for capital gains.
Upon signing the agreement, the property will be locked in at a fixed rental rate for five years and the individual can migrate to Maybank’s mortgage seamlessly after a minimum of one year renting, or continue renting with a 2% annual step-up on the rental rate from the sixth year onwards until the rental tenure ends.
The maximum rental tenure is 30 years.
On phase one of HouzKEY, Lye said the response from the public and developers was welcoming which encouraged Maybank to continue expanding the scheme to the secondary market which will see more offerings in prime locations.
“In the initial stage, only five developers were interested to participate in HouzKEY. After we officially launched the scheme to the public in January, within three to four months, there are now a total of 20 developers participating in the scheme offering 26 projects,” Lye revealed.
To date, the Maybank2Own HouzKEY web portal has garnered 200,000 visitors and more than 1,000 people have approached the developers to view their project show units.
However, she declined to reveal the number of applicants for the past four months.
“We will see some of applicants moving into their homes under the HouzKEY scheme after Hari Raya as most of the projects are now in the completion stage,” she added.
On the challenges faced by Maybank Islamic, Lye said the main challenge is to explain and educate the public on the RTO concept.
“Many have compared the HouzKEY scheme with normal property rental, which is much cheaper than RTO schemes, but they did not factor in that HouzKEY actually offers them an opportunity to own a property with a locked value which the landlord in the market will not offer to them,” she noted.