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SG bank: Sorry, no loans for London properties.

The Brexit story continues for London properties. As per a Reuters article, a top Singaporean bank, United Overseas Bank has suspended its loans programme for London properties due to the uncertainty generated by Brexit.  It was also quoted that other Singaporean banks have also advised their clients about risks such as currency losses. UOB is however the only bank to have suspended the loans for London properties. One statement from UOB’s spokesperson via email sums their decision best. “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.”
Of course, based on exchange rate alone, London properties are now cheaper as the Singaporean dollars have gained 10 percent against the British Pound since the referendum. However, the risks for Singaporean banks have increased due to the slowdown in Asia as well as the rising bad-debts in energy-related industries. Moody’s Investors Service also revised the outlook of Singapore’s banks to negative from stable. Its Vice President and Senior Credit Officer Eugene Tarzimanov said, “This reflected the “weaker operating conditions” against the backdrop of softer regional economic and trade growth” In 2015, 90 percent of UOB’s loans were to customers in Singapore, Malaysia, Thailand Indonesia and Greater China.
Singapore’s biggest lender, DBS Group Holdings is still lending but is has started to advise its customers to be cautious. Some analysts said Brexit could slow down the sale of UK properties in ASIA as buyers turn cautious. Well, I think buyers have turned cautious even within ASIA itself and I do think there are lots of opportunities within ASIA including Malaysia too. UOB did say that it would review the market regularly to determine the right timing for it to resume its property loan offering. Yes, I think the slowdown in interest for London properties may have started. Somehow, these actions from such a famous bank here in ASIA does not provide the confidence an investor needs. Happy following.
written on 1 July 2016
Next suggested article:  Singapore as a shopping paradise has a gloomy current outlook
 

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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