London property loans suspended by Singapore bank UOB due to Brexit

Singapore’s United Overseas Bank (UOB) has suspended loan applications for London properties due to economic uncertainties surrounding Brexit.

Southeast Asia’s third-largest bank by assets said it is continuing to provide finance but urged customers to be cautious.

Confirming a story in Singapore’s Business Times, a UOB spokesperson said in a statement: “As the aftermath of the UK referendum is still unfolding and given the uncertainties, we need to ensure our customers are cautious with their London property investments.

“We are monitoring the market environment closely and will assess regularly to determine when we will re-instate our London property loan offering.”

According to property consultancy Knight Frank, Singaporeans were the top Asian buyers of commercial property in the UK last year.

Since the UK voted to leave the EU on the 24 June the pound plummeted to 30 year lows and wiped $4tn of the value of global equities. The Singapore dollar gained about 10% since the referendum.

Rival Singaporean bank, Development Bank of Singapore (DBS), said they will continue to offer finance to purchase properties in London but advised caution.

In a statement, DBS’s executive director Tok Geok Peng said: “For customers interested in buying properties in London, we would advise them to assess the situation carefully before committing to their purchases as there could be potential foreign exchange and sovereign risks.”

DBS said it provides loans in Singapore dollars or pounds, but most clients opt for sterling because any rental income from London homes would be denominated in sterling.

The immediate impact of Brexit on Britain’s housing market has not been as severe as predicted according to Haart estate agents. Haart said that there were buyers seeking to take advantage of low sterling to snap up bargains but some have pulled out of transactions due to uncertainty.