Business

Brexit: Singapore bank UOB suspends London property loans

Brexit: Singapore bank UOB suspends London property loans

Singapore’s third largest lender UOB said it has suspended its loan programme for London properties.

The decision comes in response to uncertainty caused by the UK’s decision to leave the European Union, the bank said.

The vote on 23 June caused global market turmoil and pushed the pound to record lows. The Singapore dollar has gained about 10% since the referendum.

Singaporeans were among the top buyers of London property in 2015.

UOB told the BBC in a statement: “We will temporarily stop receiving foreign property loan applications for London properties.”

“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.”

Exchange rate risks

Singapore’s biggest lender, DBS, is continuing to provide financing, but is advising its customers to be cautious.

“For customers interested in buying properties in London, we would advise them to assess the situation carefully,” DBS executive director of secured lending, Tok Geok Peng, told the BBC.

“With foreign exchange risks, even if the value of the overseas property rises, any gains will be eroded if the country’s currency depreciates against the Singapore dollar,” Mr Tok explained.

Singapore’s other big lender, OCBC bank, told the BBC it had not made any changes to its advisory policy.

Head of Consumer Secured Lending Phang Lah Hwa told the BBC that OCBC was “still availing financing for London properties and monitoring the situation closely”.

courtesy:bbc.com

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