United Overseas Bank (UOB), one of Singapore’s largest lenders for the London property market and Southeast Asia’s third-largest bank by assets, has suspended its loan programme for London properties. Other Singapore banks are also advising their clients to exercise caution over foreign exchange risks in the wake of Brexit. DBS Bank warned clients that gains from an increase in the value of a property could be eroded if sterling depreciates against the Singapore dollar.
UOB explored other options in their assessment of the post-Brexit uncertainty but executives decided on a temporary suspension of loan applications to minimise the risk of having to demand part payment of a loan if London property is revalued. The suspension does not apply to commercial property lending. OCBC, Singapore’s second largest bank by assets, is still making loans for London properties but “monitoring the situation closely”. DBS is also continuing to make finance available for London property purchases. However, Tok Geok Peng, DBS’s executive director of secured lending, said that clients were being warned about potential changes in government policy. Earlier this week, Singapore-listed property developer Oxley reported an increase in inquiries about UK property from potential overseas buyers due to the weakening sterling.
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