Fitch, the credit ratings agency, has come up with a number of hypothetical scenarios facing Britain at the outcome of the European Union referendum on its membership of the 28-member state trading bloc — and it is not good news for the property market should the country vote to leave.

There is one 'Remain' and three 'Leave' scenarios. The Remain scenario — the "base case" — would have little impact on the property market, which is expected to carry on as before if Britain stays in the EU after the vote on 23 June.

But even if there is a so-called "Brexit" on what Fitch calls "favourable" trading terms with the EU, its second scenario, "property prices would be expected to be lower than the base case in this scenario", primarily because of weaker economic growth and investment.

Some commercial properties could see values fall, particularly in prime London areas, because prices rely on a steady flow of foreign investment. Demand for London office space could also weaken as companies downsize their presence or choose to invest elsewhere in Europe as a consequence of a Brexit, with the UK no longer serving as a gateway to the EU.

The third scenario, however, which would see "unfavourable" Brexit terms makes for much grimmer reading. Sterling would fall by as much as 30%. Demand for property, falling house prices and higher interest rates would cause banks heavily exposed to commercial real estate and buy-to-let lending to suffer, creating a credit crunch for small businesses akin to that of the 2008 financial crisis.

Fitch's third scenario stated:

UK homebuilders and residential property companies could be negatively affected by the lower demand for property caused by lower net immigration, higher funding and labour costs, lower available liquidity, and a weaker job market. The severity of the impact would depend on the final terms of exit and timing of the process, but the bubble-level prices in some areas could be at risk of dropping significantly.

It added:

Fitch estimates that UK house prices are currently up to 25% above 'sustainable' levels in relation to disposable income. This scenario could result in near-term price declines that result in house prices falling towards their 'sustainable' level.

Moreover, tighter controls on immigration — a desire of many Brexit supporters — would mean lower rental yields in the buy-to-let sector because migrants are three times more likely to rent than UK nationals, says the Office for National Statistics (ONS).

As for commercial property, Fitch said a Brexit "could contribute to a correction in an already overvalued sector" because of the sector's reliance on foreign investment to support prices.

There would even be sombre consequences for the social housing sector, such as housing associations, which increasingly rely on issuing debt to fund housebuilding. Weaker sterling and higher interest rates would make investment more expensive.

A fourth scenario from Fitch, revolves around a second Scottish independence referendum, triggered by a Brexit. "Fitch is not recommending any particular position, vote or outcome regarding the referendum vote on 23 June, 2016," said the agency. "This research is simply providing the financial marketplace with increased transparency as to the possible impact on our ratings of various hypothetical outcomes from the referendum."