Hermès bags and Picassos: business booms for Britain’s posh pawnbrokers

theguardian.com:

‘You wouldn’t think somebody with a £300,000 watch would need to borrow £20,000 but we have seen it a few times. It surprises you. Everyone has their cashflow issues,” says Jim Tannahill, the managing director of the luxury pawnbroker Suttons & Robertsons.

As social lives and holidaying have picked up once again, so has business for upmarket pawn shops.

The price of gold has jumped by a third since May 2019, as it tends to in times of uncertainty, so owners can borrow more against their trinkets. Diamonds have risen 12% in the past two years and, while prices have dipped in recent months, vintage watches are still up nearly 50% on two years ago amid supply chain hold-ups.

At the lower end of the market, with families struggling to pay everyday bills, business has been brisk. H&T Group, a mainstream chain, said lending secured against valuable items such as watches or jewellery was at record levels, in a trading update published last month.

But high-end lenders are busy, too, as clients seek ways to fund business investment or summer spending sprees now that travel restrictions have lifted. At Suttons & Robertsons, where the average loan is about £5,000 and some run into the hundreds of thousands, business is up 30% since January. Founded in 1770, the chain has four outlets in central London, with shopfronts in South Kensington and other well-heeled districts.

It is not cheap to borrow: interest rates vary from 3.5% a month for a loan of more than £50,000, to 6.5% a month – just over 93% a year – for loans under £1,000. However, deals can be done swiftly without reference to credit histories or lots of form-filling, with background checks on the object pawned more important than on its owner.

Clients range from small business