Hundreds of prime central London homes could be put on the market after the collapse of property lender Market Financial Solutions (MFS), a £2bn ‘shadow bank’, after it was accused of serious lending irregularities.

The bridging lender went into administration last month amid allegations that assets may have been pledged multiple times to secure loans. The collapse has left creditors facing an estimated £1.3bn shortfall.

250 property companies

Administrators are now preparing to review and potentially sell over 250 property companies linked to the lender, many of which hold luxury residential assets in some of London’s prime neighbourhoods.

The properties are in Mayfair, Belgravia, Kensington, Knightsbridge, Fitzrovia, Marylebone and Nine Elms, and range from stucco-fronted period homes at addresses such as Berkeley Street, Grosvenor Square and Portland Place, as well as high-end apartments in modern developments.

FRP Advisory has been appointed to oversee the administration of the companies and assess the assets as part of efforts to recover funds for creditors following the lender’s collapse.

Value for creditors

A spokesman for FRP Advisory said the joint administrators were reviewing the portfolio and would work with the wider creditor group to “recover the maximum possible value for creditors”.

MFS had raised more than £2bn from major financial institutions to fund its lending activities, including Barclays, Wells Fargo, Jefferies and Santander. The lender specialised in short-term, property-backed bridging finance for investors unable to access traditional bank funding.

Companies House filings show ownership of many of the properties was linked to 134 Buckingham Palace Road, the former address of MFS.

According to the Telegraph, directors associated with some of the companies include Khemanand Hurhangee, Dipeshkumar Patel and Dipendra Amin, although there is no suggestion of wrongdoing by any of them.