Banks reduced lending to the commercial property sector for the first time in four years in the run-up to the EU referendum amid fears that prices could nosedive in the event of a Brexit vote, according to a Bank of England report.

According to the Bank’s latest credit conditions survey, the availability of loans for the sector dropped sharply in Q2 of this year – the first decline since the corresponding period in 2012, and yet the signs are that banks are likely to place further restrictions on lending to the sector, amid fears that commercial property prices look set to fall.

Some analysts fear price falls of up to 20%, which although steep would be significantly lower than the decline of around 44% witnessed during the financial crisis.

Overseas banks in particular have less appetite to lend against commercial property in the UK following the outcome of the EU vote as fears over falling values in the market has caused some to consider their exposure to the market.

The commercial property market relies on ready access to bank debt to fund deals, which means that a squeeze in credit available for investors and developers could cause activity levels to fall sharply.

But despite a potential slump in commercial property values and reduced lending levels, there is no need to panic, according to Peter Cosmetatos, chief executive of the Commercial Real Estate Finance Council Europe.

He told the press: “We are not seeing the prospect of a crisis, but everyone will be in a dramatically risk-off mindset compared to the much more adventurous, entrepreneurial environment we were in until very recently.”