The National House Buyers Association (HBA) has called on the government to fine-tune the Rent-and-Save scheme into a Rent-to-Buy scheme to help Malaysians get on the property ladder.

This is because the Rent-and-Save scheme merely prolongs the housing affordability problem by another five years.

"Although the scheme appears to reduce the burden of aspiring house buyers by offering a very low effective rental rate of only RM500 (RM800 less RM300 to be returned back after five years), it still does not solve the problem that house prices are just beyond the reach of the average Malaysian" said HBA secretary-general Chang Kim Loong.

In Rent-to-Buy scheme, on the other hand, tenants have the option to acquire the units they are renting.

"If the current tenant declines the offer, he can be given the RM18,000 in cash and find another property of his choice. However, if he accepts the offer, the RM18,000 will be used as downpayment to purchase the said property and the current tenant can continue to stay but may need to pay slightly higher rentals, with the entire rental amount being used to secure the property, thus there will be no further so-called cash back amounts" explained Chang.

Announced by Prime Minister Najib Razak on 17 April, the Rent-and-Save scheme will some government properties rented for RM800 per month for five years, with RM300 as "forced savings” and RM500 as rent.

Tenants will receive the RM18,000 in savings by the end of five years, which they can use to acquire their new property. But since the housing units are not for sale, the tenants will have to vacate them to make way for the new tenants under the scheme.

"Armed with only RM18,000 in cash for a traditional 10 percent downpayment, this means that the maximum price that a person can afford is only RM180,000" noted Chang.

"Even based on current property prices, there are not many choices for properties in this price range. If we factor in just the normal inflation rate after five years, property prices will be even more expensive, leaving even less choices for a property only worth RM180,000.”

The scheme is set to be implemented at the Pangsapuri Bandaraya@Sg. Udang Segambut project, which features three blocks of 1,250 housing units. Measuring 807 sq ft, each unit will have two bathrooms and three bedrooms. Facilities include a swimming pool, multipurpose hall, five-storey car park and shop lots.

Slated for completion in December 2019, the project will be primarily developed and funded by Kuala Lumpur City Hall. It will be limited to those with monthly household income of not more than RM10,000.