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Pawn shops helping middle classes pay school fees and tax bills


Back street to high street: Some of the more upmarket pawnbrokers report that business is up by 25 or 30 per cent

Back street to high street: Some of the more upmarket pawnbrokers report that business is up by 25 or 30 per cent

Nestled around the corner from London’s Victoria station, Suttons & Robertsons looks like any other swanky, upmarket jewellery store in the heart of the capital. Stunning gold necklaces, diamond earrings and expensive watches adorn the window display – and the words ‘Founded T.M. Sutton 1770’ under the company sign lend a sense of grandeur. 

In fact, the only indication this is a pawnbroker shop are three golden globes – the trade’s traditional symbol – on a coat of arms outside. Once the preserve of the poor, out of work or simply those down on their luck, pawnbrokers have transformed their image over the years to appeal to a more affluent clientele. This year, the shift is really paying off. 

The likes of Suttons & Robertsons have enjoyed a boom as the cost-of-living crisis has bitten – and they say the surge is being driven by middle-class customers like me. 

Some of the more upmarket pawnbrokers report that business is up by 25 or 30 per cent, thanks to an influx of working families with large energy bills to pay; previously comfortable households struggling to keep up with school fees; and small business owners in need of emergency cash. 

Many of their new clients, they say, are seeking out pawnbrokers for the first time. The trade’s slick new image was no more apparent than last month, when pop star Janet Jackson was spotted leaving the shop Prestige Pawnbrokers in Chelsea, South-West London, where she had reportedly been eyeing up a rare Hermes handbag.

I’ve come to Suttons & Robertsons – which is known as ‘the Harrods of pawnbrokers’ – with my most valuable possessions in hand to see how much it’ll lend against them.

Chief executive Jim Tannahill greets me with a firm handshake, before leading me to a brightly-lit oak counter under a grand chandelier.

I show him a photograph of my pride and joy – a Lotus Elise car – to see what loan he would offer against it. ‘Sorry,’ he says firmly. ‘We do not touch any cars worth under £75,000. The cost of the valuations, transport and storage do not make it worth it.’ 

Customers have been turning up with top-of-the-range sports cars in search of some quick cash, he tells me. ‘Last week, we gave a £150,000 loan to someone who motored up in a 12-year-old Ferrari 512,’ he says. 

‘We also handed a loan of £350,000 to a customer with a 1950s Gullwing Mercedes valued at £650,000. There has been a 30 per cent increase in customers using our service over a year. The average loan amount is now about £5,000 – about double what it was a decade ago.’ 

This indicates a greater amount of borrowing from people with valuable assets. A pawnbroker typically hands over between 40 and 60 per cent of the value of an item as a loan. 

They keep the item as security in case you are unable to pay the loan back. They also charge monthly interest of typically between two and six per cent of the value of the pawned item [see panel right]. 

If you do not pay back the loan before the deadline you have agreed, the pawnbroker will sell the item to recoup the cash. 

Undeterred, I show Tannahill my next most valuable possession – a watercolour painting by the Irish artist J W Carey. He remains polite, but firm. ‘When it comes to art, it usually has to be something more well-known – and worth at least £10,000,’ he says. ‘Sadly, I am not sure it will reach such a price.’

To demonstrate what he means, he whips out an original Italian poster for the 1971 Michael Caine movie Get Carter. ‘We paid £1,200 for it earlier this year so the customer could afford a quick holiday,’ says Tannahill. ‘When he came back, I offered £2,000 to buy it – and he accepted what I believe was a fair market value.’ 

Tannahill is not the only one to notice a boom in affluent customers in need of cash. 

Later, I speak to James Constantinou, the managing director of Prestige Pawnbrokers, which has eight branches in London and across Britain and stars in the TV series Posh Pawn. 

‘There has been an explosion of interest over the past four to six months,’ he tells me. 

‘Demand is up by about 25 per cent. People are struggling to pay for things they previously could afford, such as holidays, school fees and tax bills.’ 

Constantinou says customers are coming in to pawn rare vintage Rolex watches, sports cars and designer handbags and borrow up to £100,000 on a short-term loan. 

Prestige Pawnbrokers charges around £2,900 a month for a short-term loan of £100,000. To borrow this much, you might need to hand over items with a total value of £160,000 as security.

There are a range of different types of pawnbrokers across the UK, from high street versions that accept items such as broken gold jewellery, watches and handbags, to high-end stores that accept these as well as anything from vintage wines to sports cars. 

Ray Perry, chief executive of the National Pawnbrokers Association, says: ‘Demand is coming from all walks of life as the economic crisis begins to bite. We are becoming more important than ever – filling a need where others fail to offer support.’ 

Heirloom: Jim Tannahill inspects Toby Walne¿s wife¿s sapphire ring, which is deemed fit for pawning

Heirloom: Jim Tannahill inspects Toby Walne’s wife’s sapphire ring, which is deemed fit for pawning

H&T Pawnbrokers, Britain’s biggest pawnbroker with 250 stores nationwide, has seen an uptick in customers since the start of the year – many of whom have never walked through the doors of a money lender before. Its loan book rose 17 per cent – from £66.9 million to £78.3 million between January and April.

Chief executive Chris Gillespie says: ‘The impact of inflation is being felt by individuals and businesses alike. We expect a further increase in customers this year as they try to manage the peaks and troughs of spending because disposable income is being hit by rising prices.’ 

James Kirkup, director of The Social Market Foundation charity, says rising numbers of customers are in work. 

‘Customers need cash to pay for the groceries or for an emergency purchase such as new washing machine when the old one breaks down,’ he adds. 

Back in Sutton & Robertsons, my last chance to impress Tannahill is a three-carat sapphire ring – a much-loved family heirloom that belongs to my wife. 

‘Nice box,’ he exclaims without a hint of irony. ‘Reckon the ring might be worth £1,000 – so I will give you £500 for it right now. You must pay £30 a month in interest until you reclaim within six months.’ 

Down in the vaults I understand why Tannahill was so sniffy about my most valuable worldly possessions, which other pawnbrokers might still have accepted. 

He shows me row upon row of the most collectible items all pawned by customers in need of cash. 

There is a 32-carat diamond ring worth at least £500,000; a dozen Rolex submariner watches valued at about £100,000. 

‘I even recently handed over £1million for 1,000 bottles of vintage wine, including several crates of the expensive Bordeaux Petrus,’ he adds. 

I carefully return the ring to its pretty box. Although tempted for a moment to take the cash, I decide to safely return it to my wife after all.

How loan rates can top 85% 

Pawnbrokers might charge interest of about 6 per cent a month for loans of less than £1,000. Loans are usually for six months, and the rate once fees are included works out at the equivalent of 85 per cent a year – which is expensive. 

Pawnbrokers must send out a letter 14 days before the maximum agreement period is up informing a customer they must pay back what is owed – otherwise the item may have to be sold with the proceeds pocketed by the broker.

If a sale does better than expected, the customer shares in the proceeds. Typically, at least 90 per cent of valuables are recouped. 

However, some people shop at pawnbrokers – luxury ones in particular – to snap up exclusive items they might struggle to find elsewhere.

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