Pawn shops poised as Britons run up debt

By Amie Ferris-Rotman

LONDON (Reuters) - For people who need cash but are in debt and not sure property prices will support another loan, an ancient solution may be making a comeback: the pawn shop.

The practice of pledging valuables such as jewellery in exchange for loans was mentioned in the Bible and dates back over 3,000 years to the Chinese. Used by the Greeks and Romans, it has traditionally been viewed as a seedy business and portrayed as a recourse for the desperate.

But pawning, which also happens in North America, Scandinavia and Australia, is sprucing up its image in Britain to attract more affluent clients as people sink deeper into debt and high gold prices swell the loans their jewels can secure.

Pawn franchises with glossy signs can be seen in many towns. The outlets often resemble building societies, the trusted alternative to banks that are widely used by Britons for saving and home loans.

There are now about 800 pawn shops in Britain against just 50-100 in the 1970s and early 80s, said Des Milligan, Chief Executive of the National Pawnbrokers Association (NPA), established over 100 years ago to represent the sector.

The NPA estimates around 400 million pounds a year is borrowed from pawnbrokers across Britain, but cannot give historical comparisons.

Pawnbroking has long served the poor by tiding them over during financial ruts, but it is now reclaiming city centres and brokers say they are serving people from all walks of life.

"Over the last three to four years, we have noticed the amount of professionals coming into our stores increase," said marketing manager David Towse of pawnbrokers Harvey and Thompson, which has 77 shops across Britain and is one of two pawnbrokers listed on the London Stock Exchange.