Pawnbrokers firm Ramsdens, with four stores across Leeds, is now buying more than 50kg of gold a week from customers – worth more than £250,000.

The chain is also expanding faster than at any time since it opened its first store 50 years ago and will open its fifth Leeds store this month on Kirkgate.

Leeds City Credit Union, the not-for-profit bank which operates in Leeds, said the level of business being carried out by pawnbrokers demonstrated the effects of the recession on ordinary people.

Ramsdens chief executive Peter Kenyon said the price of gold had been high for around a year and people of all ages were selling it.

He said: "I think there are some people who are doing it because they need the cash and some people are doing it because it's a good idea."

Mr Kenyon added: "The services we offer – from pawnbroking to gold buying, foreign currency to cheque cashing – are very popular with the local community and they have welcomed us with open arms."

Ramsdens is the largest independent pawnbroker in the UK and was founded in Middlesbrough in the 1950s by Herbert Smith, father of current chairman Stewart Smith.

In the past year the company has expanded rapidly, adding nine new outlets to its chain.

It has 41 shops across the north east and Scotland, including its branches in the Merrion Centre and Briggate, Harehills and Morley, and there are plans for another 10 by the end of the year.

The newest Leeds store, in a former Thomsons travel agency, will open on Monday August 24, creating three new jobs.

Leeds City Credit Union was founded for employees of Leeds City Council but expanded and is open to anyone who lives or works in Leeds. Today it has 24,000 members and manages funds of around £30m.

There are no directors and no dividend and its owners are its members.