Asia’s Mixed Reaction to U.K. Real Estate

Tower Bridge London

Tower Bridge London

While Singapore's third largest bank has suspended its loan offering for London properties, in Hong Kong, buyers have been opportunistically snapping up bargains. So who is right?

United Overseas Bank has been the first to show their hand in turning vigilant on lending for British property following the Brexit vote.

DBS Group, Singapore’s largest bank, has said it will continue to support its clients real estate purchases, though it was advising purchasers of London or U.K. property to be cautious.

Lure of a Bargain 

With the Singapore dollar increasing in value by around 10 percent against the British pound since the vote the temptation to pick up a bargain is strong, especially as the local market is moribund.

Speaking in Singapore on Thursday morning London based Liam Bailey, the Global Head of Research at real estate firm Knight Frank sought to alleviate any panic regarding British property.

Bailey laid out a raft of reasons why London in particular would continue to represent a sound property investment choice, including the ongoing infrastructure improvements, a solid rental market, a broadening economy and employment base and the fact that London is still the most important city to the ultra-wealthy, which all help to support the market. 

Holding for Longer 

Investors however, Knight Frank said, should expect to hold onto their U.K. real estate assets for longer to realise total returns of yield plus capital gain. 

In Hong Kong meanwhile the «South China Morning Post» reported that eager purchasers have been snapping up completed units where the currency differentials can be maximised. Buying off plan, common in Asia, may stall or sit in a holding pattern until a new prime Minister is elected and the direction of the British pound becomes clearer.   

In the meantime UOB said it would monitor the market environment closely and would review it regularly to determine when it could resume its property loan offering.


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