First Plus not to accept any new business

Commenting on First Plus's announcement that it will not accept any new business from 9 August, Tim Moss, head of loans at price comparison site moneysupermarket.com, said: "First Plus's announcement that it will not accept any new business from 9 August is a huge blow to the debt consolidation market.

"For people with multiple unsecured debts, often at high rates of interest, the option of using a secured loan at a lower monthly payment to reduce their outgoings has been extremely attractive. For many though this option will disappear because, while there are other secured loan providers in the market, their capacity to lend is likely to be limited.

"The recent, and further predicted, falls in house prices make the environment for secured loans difficult for consumers and lenders alike. The Competition's Commission's proposed changes to the Payment Protection Insurance market are also likely to have been a body blow to First Plus."