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Up to 300 Barclaycard staff were told they were facing job losses last week as the lender announced it was pulling out of the second charge market.

Barclays informed staff in its Cardiff office that from 9 August second charge loans, through its FirstPlus brand, would no longer be available to new customers.

Barclays said the announcement would not have an impact on the current loans of FirstPlus' 128,000 customers but only 130 of the existing 430 staff would be required to continue to service those customers.

However the lender said every effort would be made to employ the affected staff in alternative roles across the Barclays group.

Neil Radley, managing director of FirstPlus, said the decision to stop lending was due to less demand for such deals.

He said: "In the past year we have tried a whole range of activities to develop our business but the market demand simply is not strong enough. We recognise this is a difficult time for our people and we will be providing all those affected with support and assistance."

FirstPlus was formed in 1997 and was acquired by Woolwich in 1998. It became part of Barclaycard in 2004 following the purchase of Woolwich by the Barclays Group in 2000.

The announcement follows, the Woolwich's decision to withdraw its £199 internal remortgage service except in certain cases.

David Finlay, intermediary business director for Woolwich, said this was part of an overall review to manage volumes.

Lending figures from the Council of Mortgage Lenders showed that in 2006 Barclays and Woolwich enjoyed a 5.33 per cent share of the mortgage market.

Kim Barrett, proprietor of Essex-based IFA KS Barrett & Associates, said he thought managing risk could be as much of a factor in Barclays' decision to pull out of the second charge market as borrower demand.

He said: "All lenders are very much in a buying market. They can take on whatever debt they want. The quality of debt is determined by ability to repay and security offered.

"Lenders are all getting selective about the the quality of debt they take on. They do not need to take on second mortgages at the moment particularly as some do not have the money to lend on first."

"As for demand any adviser worth their salt, bearing in mind the risk the lender is taking on second charge that normally reflects the rate charged anyway, you are far better taking out the first mortgage and remortgaging the whole amount."