St.George Bank set to exit SMSF loans
One of the larger SMSF loan providers, St.George Bank, has confirmed plans to cease offering new property loans to SMSFs.
St.George Bank has confirmed to SMSF Adviser that it plans to exit the SMSF loans space as part of plans to simplify its range of products for SMSFs.
A St.George spokesperson said the bank continually reviews its products and services to ensure they meet the requirements of its customers.
"In order to simplify and streamline our self-managed super fund products, we will be withdrawing from sale our SMSF Home Loan product and Business Lending to SMSFs, effective Tuesday 31 July 2018," said a St.George spokesperson.
The bank confirmed it will "continue to service and support its existing customers".
This decision follows similar moves by other banks in recent years, with NAB announcing in 2015 that it would no longer offer loans to SMSFs for residential properties.
Most of the main lenders in the SMSF property loans space have continued to tighten lending policies for SMSF property loans in recent months, particularly in relation to the minimum assets required and the type of properties they will accept as a security.
Some lenders are worried about the current off-the-plan buying environment, particularly in Sydney and Melbourne where property prices are starting to drop, Your Welcome Finance director Chris Straw told SMSF Adviser previously.
Mr Straw said they are also looking to see that an SMSF has a certain balance in their fund and liquid assets outside of the property that’s being purchased.
“There are some minimum asset requirements where they’ve got to have a couple of hundred thousand dollars in the SMSF,” he said.
H&R Block also recently found that some clients who over-committed during market highs, or locked themselves into off-the-plan purchases, are running into troubles as lending conditions tighten and tax concessions are phased out.
“There’s been a lot of tightening in the lending world with the banks. In fact, some have dropped out of the market altogether when it comes to lending to SMSFs,” said H&R Block SMSF director Kimberlee Brown.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.