Shadow bank collapse floods London with hundreds of luxury properties
London’s super prime property market is set to be flooded with hundreds of luxury homes following the collapse of one of Britain’s biggest shadow banks.
Mansions in Kensington, Belgravia, Knightsbridge and Mayfair are being put on sale by administrators for Market Financial Solutions (MFS), all of which were controlled by individuals with links to the company.
A spokesman for FRP Advisory told the Telegraph that administrators have been appointed to oversee around 250 property companies which borrowed from MFS.
Many of these companies were ownership vehicles for luxury flats in London’s most sought-after areas, including famous addresses like Berkeley Street, Grosvenor Square and Portland Place.
Creditors have alleged in court documents that Paresh Raja, the co-founder of MFS, is linked to three of the individuals listed as directors of these properties: Kehemanad Hurhangee, Dipeshkumar Patel and Dipendra Amin.
Amin and Hurhangee are tied to Magus Chartered Accountancy, which MFS listed as one of its main accountants.
There is no suggestion of wrongdoing by Magus, MFS or the named directors.
A representative for Paresh Raja told The Telegraph: “This has nothing to do with Mr Raja.
“He is not involved in this but is pleased it is happening. These companies hold assets for the benefit of the lenders and investors. Mr Raja wishes to see the best administrators get the best return to lenders and creditors.”
Strain on luxury house market
MFS, which offered short-term property-backed loans, collapsed on 27 February, leaving major banks on the hook after it borrowed more than £2bn from the likes of Barclays, Santander and others.
The bank’s implosion accelerated a Wall Street sell-off of financial firms and asset managers as the market braced for the discovery of more private credit “cockroaches”.
The firm had a loan book of £2.4bn and net assets of £15.9bn at the end of 2024, according to its accounts.
The hundreds of properties put up for sale is likely to put further strain on London’s super prime property market, which has seen prices fall as much as 10 per cent amid sluggish demand.
Some property experts have linked the decline in super prime property sales to the reported exit of thousands of wealthy foreigners following Rachel Reeves’ scrapping of the non-dom tax regime.
Wealthy non-doms made up two thirds of sales of super-prime homes in London last year, according to luxury estate agency Beauchamp Estates.
On Monday, lobbying group BusinessLDN called on the government to revisit its shutting of the non-dom tax loophole, saying the exit of wealthy foreigners has been damaging to financial services and the creative industries.