UOVEY United Overseas Bk (PK)

By Laurence Fletcher 

Singapore's United Overseas Bank Ltd. has temporarily stopped making loans against London residential properties after the U.K.'s shock decision to exit the European Union.

UOB, which has offices in 19 countries in Asia and beyond, said in a statement Thursday that "as the aftermath of the U.K. referendum is still unfolding and given the uncertainties, we need to ensure our customers are cautious with their London property investments."

A spokeswoman for UOB declined to comment on the size of loans that the bank has made in London, but said that it was a temporary suspension and applies to residential properties.

"We are monitoring the market environment closely and will assess regularly to determine when we will reinstate our London property loan offering," UOB said.

While the impact of last week's referendum is still hard to gauge and could take years to become clear, the vote already is having a short-term impact on leasing and sales deals.

Many analysts predict a hit to London's residential and commercial property markets if jobs are moved overseas as firms grow concerned about the U.K.'s trade links. Jefferies International Ltd., for instance, has predicted that London could lose 100,000 jobs to Europe.

Homes in London's most expensive districts became one of the hottest global assets in recent years, driven in part by wealthy investors from Asia and London's perceived safe-haven status.

But prices are already on the way down. Knightsbridge prices fell 7.5% in May from a year earlier, and Chelsea prices were 3.5% lower, according to broker Knight Frank LLP. Green Street Advisors, a real estate tracker, estimates the Brexit vote will push down home prices in London by 10% to 20%.

Write to Laurence Fletcher at laurence.fletcher@wsj.com

(END) Dow Jones Newswires

June 30, 2016 09:16 ET (13:16 GMT)

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