Major lender refuses to provide mortgages for London property

July 10, 2016 by Brendan

Property Market

A Singapore bank has shocked experts in the mortgage market as it has temporarily ceased to approve loans for properties in London.

During the last few years, buyers from Singapore have been responsible for buying a lot of property in the British capital, with new, luxury apartments being among their favourites. However, United Overseas Bank has put a halt on mortgage applications for London homes.

The bank is the third largest lender in Singapore, providing mortgages for a significant proportion of British properties in the last few years. According to Asian news agencies, an email was issued from a member of the United Overseas Bank, stating that its customers should take caution when investing in London property, due to the uncertainty following the Brexit vote.

The email also says that the situation will be regularly assessed so that the bank can determine when it should reinstate lending. DBS, another bank in Singapore, has warned buyers that some of the previous gains on London properties may be at risk due to the falling value of sterling. Developers in London are suffering the aftershock of the announcement, as they are facing some problems while trying to sell their property. A number of properties are still in the development stage.

Collyer Bristow, a law firm, states that no other banks from Asia had withdrawn their support following the EU referendum.

Buyers may be uncertain following the vote to leave the EU, but mortgage advisers have undertaken CeMAP training so that they can help buyers make sound decisions when buying a property.