Inside the secretive world of luxury pawnbrokers

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If you walked past Suttons and Robertsons’ South Kensington branch, it’s unlikely you’d think there were luxury goods worth thousands of pounds locked inside.

In fact, its fluorescent lights and carpet are more akin to a high street bank than a luxury pawnbroker, where you can only enter by appointment.

But, in recent times, it has loaned £47,000 on a piece of Banksy art after a customer was landed a surprise tax bill – and £315,000 on a collection of high-end watches in order to fund a hospitality business buy.

Suttons and Robertsons has been a luxury pawnbroker since the 18th century 

The origins of pawnbroking can be traced back thousands of years and it is one of the oldest forms of lending in the world. 

Now, it is having somewhat of a resurgence after the pandemic flipped the industry on its head.

As more people struggle to access finance they are turning to pawnbroking, but what of the more secretive luxury market?

It has been pushed – or dragged, depending on who you ask – into the 21st century.

For Suttons and Robertsons, which has served its customers in one form or another since 1770, the change is welcome.

We spent a day at the premises with managing director Jim Tannahill to discuss how and why the demand for luxury pawnbroking has grown.

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Demand for pawnbroking grows
In some areas, pawnbrokers can be quite visible but the numbers of actual shops actually remain relatively low.

That said the largest pawnbroker in the UK, H&T Group which has 270+ stores in the UK, reported 'record levels’ of demand last summer.

Its pledge book – the loans against customer assets – rose from £85.1million to £114.6million over the year.

Suttons and Robertsons had a similar increase in business with its loan book up between 20 and 30 per cent year-on-year. It has also seen the number of first-time customers climb by 30 per cent since this time last year.

Suttons and Robertsons’ managing director Jim Tannahill has been a pawnbroker for 40+ years

'We do get a good suite of new customers, but like the rest of the industry we are reliant on the fact that once people have been using our service they do repeat,’ says Tannahill.

'Probably 50 per cent of anyone’s book will be repeat clients and then you top that up with new clients. Some just borrow once.’

Tannahill started his career at TM Sutton and worked there for a number of years before starting out on his own. 

In 2019, Hopkins and Jones acquired all of the trading assets from Suttons and Robertsons, which was owned by The Money Shop, and he is now one of the shareholders.

'I’m still seeing some of the same faces that I used to see before I left, which was about 10 years ago. I think if that’s still happening your service must be of use to people.’

The lack of access to loans, especially since the collapse of online payday loans no credit check – http://loanstoonline.com lenders, means it still serves a purpose, he argues.

'If you want a mid-thousands pound loan, its difficult. Getting mainstream quick access to that sort of finance is increasingly difficult. The anti-money laundering side of things is a bit more long-winded, but if you wanted £10,000 from a bank it’s just not happening in a day.

'If you’re looking to borrow money over a short period of time, [pawnbroking] is a viable and quick option.’

How does luxury pawnbroking work?
Unlike non-luxury pawnbrokers, Suttons and Robertsons offers loans secured against luxury items, such as watches and jewellery.

It can also buy items but the vast majority of its business is in loans, and it is fully regulated by the Financial Conduct Authority (FCA).

The asset is valued and an offer will be made, at which point the customer enters into a pawnbroking loan agreement. Pawnbrokers will work on cash value and will lend a percentage of that, usually between 75 and 80 per cent.

Suttons and Robertsons will hold the asset in one of its secured vaults until the agreed period of time – usually six months – is over, although you can return at any time within this time.

Once the full loan amount and accrued interest is paid, the item will be returned to the customer.

Not everyone can walk in and get a pawnbroking loan though. At Suttons and Robertsons, the minimum loan is £500 – higher than the £400 average loan paid out by other pawnbrokers – while the average loan size is £6,000.

Tannahill says he has loaned up to half a million pounds, and the average loan size is rising in part because of prices going up in general.

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