Pawn shops 'on the up'

28/05/2009

The credit crunch has led to higher levels of business at Britain's pawn shops.

New financial figures from Albemarle & Bond, which runs over 100 outlets across Britain, show a 35 per cent rise in profits.

This suggests that more and more people are pawning their valuables - getting loans while using jewellery and other goods as security - in the recession.

House prices have slumped 15 per cent over the past year and credit conditions from lenders have tightened - putting more and more people under water and leading them to seek out alternative ways of making ends meet.

Increased usage of the pawn shops comes with an apparent rise in the number of people using illegal loan sharks.

The Local Government Network said earlier this week that 35,000 people could be forced to use these lenders in the downturn.

Commenting on the Albemarle & Bond figures, EuroDebt director Kevin Still said: "Pawnbrokers are available for anyone to use with anything of value. They were historically used by about two per cent of the poorest members of the population each year, amounting to approximately 400,000 loans, where an item of value is required as security for a loan - on average £120 over a period of three and a half months.

He added: "Their rise in use seems to reflect a mixture of financial desperation and the lack of legal lending alternatives. An estimated 29 per cent of customers fail to recover their goods once pawned. We would always strongly advise people in financial difficulty to take professional advice. Debt Relief Orders may be an option for people effectively using their last tangible assets to raise cash."

Tags; Debt Management and Banking, Retirement Money Problems, Credit Card Lifestyle,

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