From News Dot Sky Dot Com
2:32am UK, Saturday August 28, 2010
Darren Little, Midlands correspondent
Pawnbrokers are experiencing a resurgence in business with the number of shops in the UK more than doubling since 2003.
The National Association of Pawnbrokers is predicting that the trend will carry on as banks continue to deny people easy credit.
It is a huge turnaround for an industry which was thought to be dying out 20 years ago but now seems to have attracted a new generation of customers.
Paul Cockell, who set up Regency Jewellers and Pawnbrokers in Leamington Spa 10 years ago, says he has seen a 10 fold increase in business.
“The kind of things that are coming in are more expensive items, the Rolex watches, Breitlings, diamond rings as opposed to smaller bits of gold and jewellery,” he said.
Major chains of pawnbrokers are now commonplace on high streets and they are making a lot of money from their easy cash business.
H&T for example reported profits up more than 70% in the last six months.
Unsurprisingly 60% of those using pawnbrokers are unemployed, mainly pawning jewellery and watches, taking advantage of what is a straightforward service.
However, Nathan Finch, of the National Pawnbrokers Association, said there had been a gradual shift in the type of clientele now using the service as bank loans dry up.
“We haven’t seen a ridiculous rise in business but we seen a steady increase in a new type of customer looking to pawnbrokers to raise cash,” Mr Finch said.
“I think certainly as mainstream credit is harder to come by people are looking to alternatives and pawnbrokers are seen as a fast and speedy alternative.
“People historically assumed it was just working class people who came to pawnbrokers but that’s changed and it its changing more.
“It’s just really everyday day people who have bank accounts and they prefer the speed and convenience of coming to a pawnbroker.”
He added: “I think the main difference between us and mainstream finance at the moment is that we look for reasons to lend while they look for reasons not to lend.”
It is likely pawnbroking will continue to be a booming industry for the immediate future.
Many of the major brokers are already planning to open more stores.
The test of the industry will be whether its success continues when the economy picks up.
Tags: consumer credit, Credit Crunch, economic crisis, National Pawnbrokers Association, Pawn Loans, pawnbroker, pawnshop, United Kingdom
