In the United Kingdom, the pawnbroking sector has seen a number of significant trends in recent years. One of the most notable trends is the increasing popularity of online pawnbrokers. These businesses allow customers to borrow money against the value of their assets without having to visit a physical store. This convenience has helped to attract a new customer base, particularly among those who are time-poor or who live in rural areas.
Another trend that has emerged is the growing number of women using pawnbroking services. This is likely due to the fact that pawnbrokers offer a more flexible and affordable form of credit than traditional lenders. As a result, women are increasingly turning to pawnbrokers when they need access to quick cash. Finally, there has been a rise in the number of high-value items being pledged as collateral.
This trend is being driven by the increased value of luxury goods, such as jewellery and watches. As a result, pawnbrokers are able to offer larger loans and more attractive interest rates. These trends are likely to continue in the coming years, making pawnbroking an increasingly popular option for those in need of quick cash
This article will walk you through all the latest trends currently affecting the pawnbroker industry.
Since the early 1990s, the pawnbroking sector in the UK has grown steadily. Customers from all walks of life have been using pawnbroking services more frequently in recent years. There was a poor perception of the industry in the past due to bad publicity.
Pawnbroking has been promoting itself as a regulated, professional and customer-service-oriented money services industry with high standards, thanks to efforts by the National Pawnbrokers Association (NPA) and the industry as a whole. Money service businesses (MSBs) have improved their image and are now viewed as legitimate alternatives to traditional banking services.
Pawnbroking services have become increasingly popular over the past few years for a number of reasons. Pawnbrokers provide quick and convenient loans – you do not have to fill out lengthy forms and there is no waiting period.
Short-term loans can be taken out by people who are paid on a monthly basis if they need extra funds until their next pay day. For those who are unable to obtain credit through a bank or building society or do not have a bank account, pawnbrokers are also an attractive option. There are around eight million people in this position in the UK, including some economic migrants from places like Eastern Europe who came to work in the UK. In 2016, Britain voted to leave the EU, which are likely to have an impact on this figure, as well as the government’s pledge to reduce immigration.
As the government cracked down on payday lenders that charged extremely high interest rates, the demand for pawnbrokers rose. A cap on interest rates was introduced in January 2015 when the authorities started investigating these companies’ operating practices, which resulted in a number of legal issues for the sector. As a result of Wonga’s collapse into administration in 2018, payday lenders are now subject to tougher rules as well as price caps, which further damages their profits and undermine their business models.
Pawnbroking services are in high demand and there is a general initiative by the subprime money services industry to improve its image, which has led to the growth of a number of large players, including the Cash Generator franchise. The competition in the payday lending market may decrease from that quarter to the following, but it remains crowded and highly competitive.
In order to make pawnbroking an attractive option for an increasingly wide audience, the industry must continue to promote itself as a legitimate money lending service. A recent ‘credit crunch’ helped pawnbrokers expand their customer base as more people turned to them to sell jewellery and other valuables – often to pay for school fees. Pawnbrokers also became popular as a source of short-term finance for small businesses. During 2013, the economy began to improve, and continued to improve throughout 2014 and the first half of 2015. However, the economy slowed towards the end of the year. In June 2016, both consumers and businesses lost confidence in the economy due to the Brexit vote.
A lower pound after the vote led to an increase in inflation and a reduction in consumers’ purchasing power. Throughout 2017 and into 2018, the economy continued to perform poorly. For the foreseeable future, littlechange is expected. Since people are struggling to make ends meet, small, short-term cash loans are likely to remain in high demand, which will benefit the pawnbroking industry.
In the early 2010s, gold prices also surged, benefiting the industry. The gold was then sold to bullion houses for scrap value, which encouraged customers to sell their gold jewellery for cash. In the wake of the price drop of gold, there was a sharp decline in the number of people seeking to sell their gold items. Profits were boosted again by the price increase in 2016 and 2017.
Keeping up to date with developments
Keeping up with industry developments is easy when you join a trade association. Pawnbrokers in the UK are represented by the National Pawnbrokers Association (NPA). As a professional organization, the NPA is committed to raising the public’s awareness of quality, professional pawnbroking. Additionally, The Pawnbroker is published quarterly. The NPA has a website where you can contact them.
Jewellery retailers in the UK are represented by the National Association of Jewellers (NAJ). The Jeweller is sent to NAJ members seven times a year. Find out more on their website.
Gold prices and jewellery market trends should also be kept in mind. Then you can sell unredeemed gold items at the right time for scrap, taking advantage of high gold prices and ensuring the accuracy of your pawn valuations. World Gold Council, for example, publishes gold prices online and in many daily newspapers.
Trade shows
Attending a trade show will provide you with a lot of useful information, such as one for the jewellery industry or one for pawnbrokers. There will be opportunities to meet manufacturers, suppliers, and importers in the jewellery and pawnbroking industries. More information about upcoming trade shows and exhibitions can be found on the Exhibitions website.
Conclusion
The pawnbroking industry is set to expand into 2023 as the UK’s economy is set to decline, as expect the pawn broker sector is expected to buck this trend as people are reliant on short term borrowing. The rise of online brokering within the pawn industry is expected to growth 2023 as businesses within the sector come online with their digital offerings.
Lee Jones is a seasoned Business Finance Specialist with over two decades of invaluable experience in the financial sector. With a keen eye for market trends and a passion for helping businesses thrive, Lee has become a trusted advisor to countless organizations seeking to navigate the complexities of finance.