Pawn stars in the high street
With the fourth interest hike rate now confirmed by the bank, high street banks will be ever warier of lending to people with poor credit ratings, which may explain why pawn shops are back on the streets in a big way.Although there were only 50 to 100 pawnbrokers in Britain during the 1970s and 80s, nowadays the high street boasts around 800 pawn shops, according to the National Pawnbrokers Association.Currently around £400 million worth of loans are taken out against personal possessions by people in Britain who want cash but not credit checks.Although interest is generally charged at the rate a bank would charge, regular customers can get discounts and there is no risk of getting further into debt as the loan is secured on the valuables themselves.With Britons owing approximately £1 trillion in loans to conventional lenders, it is no wonder that more people are using pawnbroking services.Although pawn shops were once seen as a recourse for the desperate, pawnbrokers now have glossy exteriors, two are listed on the London Stock Exchange and they serve all sorts of clients."It's a totally different ballgame from 20 years ago when I started," said Stephen Pam, manager of Hatton Garden Pawnbrokers in London. "Interest rates are very low and people over-extend themselves or have big mortgages. That's when they come to a pawn shop."
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