Singapore’s third-largest lender, United Overseas Bank (UOB), announced in an email Thursday it is temporarily suspending housing loans for customers looking to buy property in London. The decision was taken to shield its customers from uncertainties surrounding the referendum in the United Kingdom that voted for the country to leave the European Union.
The email, cited by various news outlets, said: “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.”
UOB, which is also Southeast Asia’s third-largest bank by assets, said it had explored other options before taking the decision, and it would reinstate the loans based on its assessment of the market.
The bank’s website, which still mentions London as one of the places it finances property purchases in, also lists Australia, Japan, Malaysia and Thailand as other countries it provides loans to buy homes in.
Meanwhile, Singapore’s biggest lender, DBS Group Holdings, said it would continue with its loans for property purchases in London, but sounded a note of caution for its customers.
Tok Geok Peng, DBS’ executive director of secured lending, 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.”
According to property consultancy Knight Frank, Singapore accounted for the largest chunk of Asian buyers of London property in 2015. Another property consultancy, Jones Lang LaSalle, said London property prices could fall by 10 percent over the next two years, while KPMG forecast housing prices to fall 5 percent across the U.K., Agence France-Presse reported.