The raids were part of an investigation run in parallel with the U.S. Homeland Security Investigations directorate into a network suspected of exporting qat to the U.S and Canada.
"The arrests were a part of a pre-planned, intelligence-led operation into suspected fund-raising for terrorism overseas," London's Metropolitan Police said.
Qat is grown and widely chewed in the Horn of Africa and in Yemen. It is habit-forming and excessive use can cause insomnia, stress, depression and apathy. The plant, whose leaves must be consumed fresh, is legal in Britain but is a controlled substance in the United States and Canada.
Police did not disclose the origin of the smuggled qat or where they believed the funding was targeted, but international authorities have previously said profits from the qat trade are used to finance militant groups like al Shabaab in Somalia.
A U.N. Monitoring Group report last year estimated qat traders using one Mogadishu airfield in an area controlled by al Shabaab would have paid the militant group around $500,000 in taxes over a 10-month period in 2010.
British police were also searching seven other residential properties in London, Coventry and Worthing on England's southern coast and business premises in Coventry.