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Going for broking
Pawnbroking has a shady past and is seen by many people as going hand-in-hand with extreme poverty – but it is also an industry which is expanding massively.
There are many horror stories from the past of poor families having to pawn the essentials of life to get by, but these days it is a business that is finding a new audience.
Chris Brown, 37, is a seventh generation pawnbroker and director of Herbert Brown's, which has 30 branches across Yorkshire, five of them in Leeds – the first opened on Eastgate in 1840.
He says that pawnbroking is now a heavily regulated and useful service.
"There has been a massive expansion in the last 20 years. Customers are clearly happy with our service. Some of them use us 10 or 15 times a year.
Interest
"Pawnbrokers are a good way of getting money in the short term. You can, for example, secure a 1,000 loan for just four per cent interest – or 40 – for a month; there's not a bank in the country where you could get that.
"We have customers who borrow money for deposits for houses and company bosses who might be waiting for a cheque to clear, who borrow money to pay the wages of their staff."
Over the years, Brown's has accepted some strange things as collateral on loans, including a horse and trap; the deeds to an island off the coast of Scotland which, when investigated, had actually sunk into the sea 150 years previously; a Victorian bath that had been used by one of the local landed gentry; bagpipes and regimental family silver from the 1800s and even a canary in a cage.
These days loans are secured mainly on gold, jewellery and expensive watches. Staff are trained to spot fakes – in the last 18 months they have turned down loans against dozens of fake gold signet rings, but they still have unusual items presented.
Mr Brown said: "We had a 15-carat diamond which was pawned for a loan of 60,000, which was used as a deposit on a house in Spain. There was another man who made a gold dog collar for his dog and buried it with the animal but then fell on hard times and had to dig up the dog to pawn the collar."
Typically, loans are for up to half the object's value, interest rates vary from four to eight per cent and pawnbrokers keep the objects handed in for up to eight months, after which time they allow the customer to buy them back by repaying the loan and interest.
If that doesn't happen, the goods are sold on the customer's behalf, but even then, if the object makes a healthy profit, the customer can still get something back.
Mr Brown added: "Say you bring in a Rolex and we lend you 2,000 against it and you are unable to get it back after seven months. We will service it, clean it and then sell it. If it sold for 4,000, then we would deduct the money owed and any costs incurred in servicing it and if, after that, there was, say, 1,000 left over, it would go to the customer."
Currency
Pawnbrokers also offer an array of financial services these days, with everything from currency exchange to money transfer and speed loans (for anything from 300 to 1,000) to saving schemes; plus for those simply wanting to sell jewellery – the price of gold has doubled in the last 18 months – it sidesteps the anonymity of open-markets such as eBay.
They also offer an alternative to those who either do not qualify for bank accounts or who don't want to place their money with banks.
Des Milligan, from the National Pawnbrokers Association, said: "Probably less than one per cent of the population have ever been to a pawnbrokers and some feel there is a stigma attached to it, but mostly these are unfounded myths. Many feel that if they take something, like a diamond, to a pawnbroker, they won't see it again, but that's not the case."
Catherine English, manager at Herbert Brown's Eastgate shop, said: "We have all kinds of customers, from people who rarely come to regulars and they bring all sorts of things with them.
Mother-of-five Marsha Milnthorpe, 22, from Beeston, is a customer at Brown's. she said: "I've pawned some rings, I use the service whenever I'm skint. I will buy them back, I know they will keep them here for eight months I just need the money now."
James Coleman, 70, from Cross Green, Leeds, who still works as a mechanical engineer, has pawned some gold rings for 227. He said: "I have just got a new BMW 2.25 Sport and I need the money to pay the insurance. I don't have it at the moment, which is why I've come here.
"I have been coming here for years and I must have pawned those rings about a dozen times. I will buy them back afterwards, maybe in a few weeks or months.
"I still work, I have worked every day of my life, I just don't have the money I need right now and this is a good way for me to get it."
Factfile
The symbol for pawnbrokers is three golden balls, derived from the coat of arms of the Medici family, who flourished in Renaissance Europe and were involved in banking.
During the early 1980s, pawnbrokers had all but ceased to be, with just 50 shops in the whole of the UK. Today, there are thought to be more than 800, with 540 of those represented by the National Pawnbrokers Association.
NPA membership increased ten per cent in the last year alone.
A recent survey of 440 pawnbrokers affiliated to the NPA found that 92 per cent had seen an increase in business in the last six months, while 96 per cent were predicting further increases in the coming year.
Pawnbrokers are mentioned in the Bible, at Exodus 22.25-27 and various passages from Deuteronomy, wherein they are prohibited from taking anything essential to life as security and from practising usury.
In 1338 Edward III pawned his jewels to raise money for his war with France. King Henry V did the same in 1415.
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