Previously affluent cities that have founded their wealth on the processing of natural resources are attracting pawnbrokers who are cashing in on a newly found lucrative market, as the increasing cost of living impacts even formerly wealthy business people. With echoes of the last century, when cotton mill owners found their wealth decline because of changes in import tariffs and as man-made textiles came into play, posh pawnbrokers have moved into Aberdeen, the Granite City famous for its production and processing of oil as well-off executives trade in their high performance cars and Rolex watches for cash. Wives are cashing in jewellery, too.
Overall, there has been a steady increase in the number of enquiries that ‘posh’ pawnbrokers such as Neil Mitchinson, have received. In fact, he opened an office in Aberdeen specifically designed to tailor to well of oil executives and their wives. These are items that the owners value and, as such, they want them back. Posh pawnbroker, Neil Mitchinson of Edinburgh Asset Finance (EAF) says only around 5% of people in this bracket who pawn goods, fail to reclaim their treasured items. This is not a ‘buying and selling’ game, he says, but with banks charging high rates of interest, securing a loan against an iconic brand such as a Rolex submariner watch at the 3-7% interest his company charges, makes sense. A decision can be made within 24 hours and a watch valued at £5000 can comfortably secure a short-term loan for 14 to 21 days (or longer) in order to pay a tax bill and keep things afloat.
People bring into play other assets when cash gets tight. The oil industry has been particularly hard hit recently with no signs of improvement in the price of oil which is likely to remain low for a further decade. The North Sea oil industry could be facing many years of misery with crippling knock on effects on the Scots economy according to experts north of the border. While there are signs of investment in the infrastructure for the North Sea oil industry such as a £10M upgrade for the Port of Dundee, the global oil price crash has forced the former high rollers to claw back cash in order to ride out the downturn which has led to thousands of redundancies. Formerly, wealthy oil executives who may be facing the chop are borrowing against high end assets such as sports cars and jewellery, oil paintings and, in one case, even a shooting estate, in order to maintain cash flow when things get tight. While it’s not right across the board, it’s certainly a sign of the times reflecting how pawnbrokers have moved into the gap left by the banks.