Brexit uncertainty prompts Singapore bank to halt London property loans

Another sign that last week's Brexit vote could hit the London property market emerged today, as a major Singaporean bank suspended loans to customers buying homes in the capital.

United Overseas Bank, the third largest lender in Singapore, said it was stopping its loan progamme for the "time being" after Britain voted to leave the European Union last week.

The decision follows warnings from other banks in the city-state to clients over potential political and foreign exchange risks.

DBS Bank said the pound falling against the dollar could slash gains from rising property values, according to the Financial Times.

Fears that the London housing market could crash in the wake of a Leave vote have so far proved wide of the mark, but yesterday evidence emerged that some domestic buyers are pulling out of deals amid the fallout.

Galliard Homes, London’s second largest house builder, said that one buyer exercised a get-out clause put in the contract to protect buyers if the UK left the EU, the Independent reported.

Bankers at foreign companies have also retreated from transactions over job security concerns, it added, while other reports suggest buyers have been trying to negotiate discounts.

In the meantime, investors from China and the Middle East and even Italy and Spain have been bombarding estate agents with enquiries hoping to capitalise on weak sterling and get a cheap deal.