London property prime central Mayfair
Property property prices in the UK could crash if Britain votes to leave the EU in the 23 June referendum Getty Images

House prices may tumble if Britain chooses to exit the European Union (EU) in its summer referendum, according to a leading credit rating agency. Standard & Poor's (S&P) said in a report that a so-called Brexit "could potentially reverse the significant boost to real estate asset values that the UK, and London in particular, has experienced in recent years".

But it is commercial property, in particular office space, that would suffer most as firms left London, downsized their operations in the city, or decided not to invest there in the first place. As a consequence, the credit ratings of those companies directly involved in UK property, or who are exposed to it through investments, such as mortgage-backed securities, are at threat because of a Brexit scenario.

"Uncertainty leading up to the 23 June vote is likely to have a somewhat paralysing effect on investor decisions on UK real estate purchases," said Standard & Poor's credit analyst Marie-Aude Vialle. "Should the country decide in favor of a Brexit, prolonged uncertainty during the subsequent exit negotiations may turn investor sentiment more negative."

Capital Economics, a consultancy, said previously that a Brexit would have little impact on the UK's residential property market. "Altogether, uncertainty in the short term might lead to a small drop in transactions and a slight easing in house price growth," wrote Hansen Lu, a property economist at Capital Economics. "But we think the prospect of Brexit driving a collapse in prices is slim."

Several banks, including Goldman Sachs and Citi, have warned a Brexit could cut a fifth off the value of sterling. This may end up a boon for the prime central London property market, however, because sterling-priced assets would become cheaper to foreign investors, who may in turn pour more money into the city. London property boomed in the aftermath of the financial crisis for this reason among others.