Firstplus to quit home-loans business

Published on Tuesday 8 July 2008 21:50

FIRSTPLUS has became the latest casualty in the troubled home-loans sector with the announcement that it is to stop writing new business.

The move by the group, which is owned by Barclays, will lead to 300 job cuts in its Cardiff office.

Its departure will leave just seven players in the market, down from 18 last year before the credit crunch hit.

Firstplus, known for its adverts fronted by Carol Vorderman, said it would no longer be writing new business from 9 August due to a fall in demand.

It added that it had taken steps to try to boost business, including launching new brand Fair & Square, which aimed to make home loans more transparent.

The firm has also attempted to target a new group of consumers by advertising Fair & Square on mainstream channels and during primetime television, whereas Firstplus adverts had typically run on daytime shows.

Other innovations included offering lower interest rates for an introductory period.

But the group said demand for the product was simply not there, leading to yesterday's decision.

Neil Radley, managing director of Firstplus, said: "In the past year we have tried a whole range of activities to develop our business but the market demand simply isn't strong enough."

Trade union Unite said it was "incensed" at the decision to cut 300 jobs, adding that it had secured an agreement from Barclays to seek alternative jobs for those who wanted to remain employed in the bank, although these options were likely to be "limited".

Some 130 staff will be retained at the Cardiff office to look after existing customers, whose loans will not be affected by the announcement.