Street to street: Some of the most elite pawnshops report that business has grown by 25 or 30 percent

Located around the corner from London Victoria Station, Suttons & Robertsons looks like any other chic jewelry store in the heart of the capital. Gorgeous gold necklaces, earrings with diamonds and expensive watches adorn the window, and the words “Founded TM Sutton 1770” under the company’s banner give a sense of grandeur.

In fact, the only sign that it is a pawnshop are the three golden globes – a traditional symbol of trade – on the coat of arms on the outside. Once a sanctuary of the poor, unemployed or just the unlucky, pawnshops have changed their image over the years to attract more affluent customers. This year the change is really bearing fruit.

People like Suttons & Robertsons have been booming when the cost of living crisis has bitten – and they say the surge is due to middle-class customers like me.

Some of the more elite pawnshops report that business has grown by 25 or 30 percent, thanks to an influx of working families with large electricity bills; formerly comfortable families who have difficulty withholding school fees; and small business owners in need of emergency cash.

Many of their new customers are said to be looking for pawnshops for the first time. The new image of the trade became no more apparent than last month when pop star Janet Jackson was spotted leaving the Prestige Pawnbrokers store in Chelsea, south-west London, where she was reportedly examining a rare Hermes handbag.

I came to Suttons & Robertsons – which is known as “Harrods of Pawnshops” – with my most valuable asset in hand to see how much it would lend them.

CEO Jim Tanakhil greets me with a firm handshake before bringing me to a brightly lit oak counter under a grand chandelier.

I show him a picture of his pride and joy – the Lotus Elise car – to see what kind of loan he offers for it. “I’m sorry,” he says firmly. “We don’t touch cars worth less than £ 75,000. The cost of valuation, transportation and storage does not justify it. ”

He tells me that customers are turning to the highest sports cars in search of quick money. “Last week we gave a loan of £ 150,000 to someone sitting in a 12-year-old Ferrari 512,” he says.

“We also gave a £ 350,000 loan to a customer with a 1950s Mercedes Gullwing, valued at £ 650,000. During the year, the number of customers using our service increased by 30 percent. The average loan amount is now around £ 5,000 – about twice as much as it was ten years ago.

This indicates a larger amount of borrowing from people who own valuable assets. The pawnshop usually lends 40 to 60 percent of the value of the item.

They keep the item as collateral in case you are unable to repay the loan. They also charge a monthly interest, usually two to six percent of the value of the mortgaged item [see panel right].

If you do not repay the loan earlier than agreed, the pawnshop will sell the goods to repay the money.

Without fear, I show Tanakhil my next most valuable possession – a watercolor painting by Irish artist J. W. Carey. He remains polite but firm. “When it comes to art, it usually has to be something more famous – and cost at least £ 10,000,” he says. “Unfortunately, I’m not sure it will reach that price.”

To demonstrate what he means, he is shooting an original Italian poster for Michael Kane’s 1971 film “Get Carter”. “We paid £ 1,200 for it earlier this year so the client could afford a quick break,” Tanakhil says. “When he came back, I offered £ 2,000 to buy it and he accepted what I believe is a fair market price.”

Tannahill isn’t the only one to have noticed a boom of wealthy customers in need of cash.

Later, I spoke with James Constantine, Managing Director of Prestige Pawnbrokers, which has eight branches in London and across the UK and starred in the series “Gorgeous Pawn”.

“There has been an explosion of interest in the last four or six months,” he tells me. Demand has grown by about 25 percent. People have a hard time paying for what they used to be able to afford, such as vacations, school fees and tax bills. ”

Constantine says customers come to mortgage rare vintage Rolex watches, sports cars and designer bags and borrow up to £ 100,000 in short-term credit.

Relic: Jim Tanakhil inspects Toby Walne's wife's sapphire ring, which is considered suitable for bookmarking

Relic: Jim Tanakhil inspects Toby Walne’s wife’s sapphire ring, which is considered suitable for bookmarking

Prestige Pawnbrokers takes around £ 2,900 a month for a short-term loan of £ 100,000. To borrow this amount, you may need to transfer items worth a total of £ 160,000 as collateral.

Across the UK, there are many different types of pawnshops, from street versions that accept items such as broken gold jewelry, watches and bags, to high-end stores that accept them, as well as everything from vintage wines to sports cars.

Ray Perry, CEO of the National Pawnshop Association, says: “Demand is coming from all walks of life as the economic crisis starts to get stronger. We are becoming more important than ever – meeting needs when others cannot offer support. ”

H&T Pawnbrokers, the UK’s largest pawnshop with 250 stores across the country, has seen a rise in customers since the beginning of the year, many of whom have never walked through a moneylender’s door before. His credit book rose 17 percent from £ 66.9 million to £ 78.3 million from January to April.

CEO Chris Gillespie says: “The impact of inflation is felt by both individuals and businesses. We expect a further increase in the number of customers this year as they try to manage peaks and minimums because cash income has been hit by rising prices. ”

James Kirkup, director of the charity The Social Market Foundation, says a growing number of customers are working.

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

Back at Sutton & Robertsons, my last chance to impress is Tannahill – a three-carat sapphire ring – a very beloved family heirloom belonging to my wife.

“Beautiful box,” he exclaims without a hint of irony. “Calculate the ring can cost £ 1,000, so I’ll give you £ 500 for it right now. You have to pay £ 30 a month in interest until you get a refund within six months ”.

Downstairs, in the vaults, I understand why Tanakhil was so sniffed about my most valuable possessions in the world that other pawnshops could take.

He shows me a number of the most collectible items pledged by customers who need money.

There is a diamond ring weighing 32 carats worth at least £ 500,000; a dozen Rolex submarine watches worth about £ 100,000.

“I even recently donated £ 1 million for 1,000 bottles of vintage wine, including several boxes of expensive Bordeaux Petrus,” he adds.

I carefully return the ring to the beautiful box. Despite the fact that I was tempted to take the cash for a moment, I still decide to calmly return it to his wife.

As interest rates on loans can exceed 85%

Pawnshops can charge about 6 percent interest per month on loans worth less than £ 1,000. Loans are usually issued for six months, and the rate after the inclusion of fees is 85 percent per year, which is expensive.

Pawnshops must send a letter 14 days before the expiration of the maximum term of the agreement informing the customer that they must repay the debt – otherwise the goods may have to be sold at the expense of the broker’s pocket.

If the sale goes better than expected, the customer is involved in the revenue. As a rule, at least 90 percent of the valuables pay off.

However, some people shop at pawnshops, particularly at luxury, to purchase exclusive items that they may have difficulty finding elsewhere.

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