Barclays unit Firstplus stops lending and cuts jobs

LONDON (Reuters) - Barclays' (BARC.L) unit Firstplus, a provider of homeowner loans, plans to stop lending to new customers next month due to slowing demand, it said on Tuesday, hitting around 300 jobs at the business.

Firstplus, which became part of Barclaycard in 2004 following Barclays' acquisition of lender Woolwich in 2000, provided second-charge loans, allowing consumers to borrow based on the equity in their home.

"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," said Neil Radley, Firstplus managing director.

The homeowner loans sector has been battered by the housing market downturn and trouble in the mortgage market. Providers have raised their rates and reduced the amount they are prepared to allow consumers to borrow.

Wales-based Firstplus will stop making loans to new customers from August 9.

It said the news would not affect its existing 128,000 customers and some 130 employees will remain to deal with existing loans. A further 300 positions, however, will be cut, though employees could find roles elsewhere in Barclays.

(Reporting by Clara Ferreira-Marques; Editing by Paul Bolding)