A lack of banking credit available to consumers has led to a massive increase in pawnbroking businesses, according to a new report.
Whilst banks have reduced their properties on the high street by one per cent since 2008, pawnbrokers have increased their stores by 44 per cent over the same period.
A new report entitled ‘Pawn is Reborn’ by The Local Data Company shows that Cash Converters is the dominant pawnbrokers on the high street with 17 per cent of the overall market (down three per cent from 2008).
H&T Pawnbrokers has held its position as the second biggest in the sector, consistently holding 15 per cent of the market since 2008, whilst Cash Generator is at third place with 12 per cent.
Matthew Hopkinson, Director at The Local Data Company, commented: “From membership of the British Retail Consortium, to prime pitch presence across hundreds of towns and significant profits, this sector has shown how it can take advantage of a recession and turn it into a boom.
“Is it a result of previous consumer excess in discretionary high value items, the 30 per cent rise in the price of gold or the lack of propensity of the banks to lend – or indeed a combination of all three?”
Central London currently has the highest number of pawnbrokers of any city with 21, up from 14 in 2008, whilst the south-east of England has seen the biggest rise in these stores, increasing 45 per cent to 124 in two years.
The rise in pawnbrokers correlates with an overall decline in retail banking properties, with Greater London hardest hit and declining 35 per cent. However, some areas did see rises in the number of banks, with Scotland seeing properties rise by eight per cent.
Mark Hudson, Retail Leader at PricewaterhouseCoopers, said: “In some industries, when businesses close, capacity is taken out of the market.
“With retail, the business may go but the space remains - and businesses and economic models will reinvent themselves to take advantage.”
Liz Peace, CEO of the British Property Federation, added: “The rise of pawnbrokers shows that the UK’s culture of debt is coming to an end as families balance their books.
“We expect January’s planned vat rise and government spending cuts to pile further pressure on consumers.”