Barclays withdraws Firstplus loans and cuts 300 jobs

by Gill Montia

Story link: Barclays withdraws Firstplus loans and cuts 300 jobs

Barclays’ Firstplus division, which provides loans to homeowners who already have mortgages on their properties, is closing its doors to new business.

Firstplus is currently the UK’s largest provider of homeowner loans but has experienced a downturn in business.

The company says the decision will not affect its 128,000 existing customers.

According to Neil Radley, managing director of Firstplus, the secondary homeowner loans sector has been affected by higher mortgage costs and market demand has fallen sharply.

As a result, Firstplus will stop selling loans on 9th August and the company will shed 300 jobs at its base in Cardiff.

Around 130 staff will remain to deal with existing customers and Barclays says it is seeking alternative opportunities within the group for Firstplus staff losing their jobs.

The news has prompted a profits warning from Moneysupermarket.com, the price comparison website, which is forecasting that the withdrawal of Firstplus loans may reduce profit by £5 million (almost 10%) in 2008.