The fear factor is causing investors to withdraw money from commercial property funds, according to one of the City's senior fund managers.

Philip Nell, a fund director at Hermes, said there had been "a massive over-reaction to what's been going on over the last two weeks".

Mr Nell used to run the Aviva property fund that closed its doors along with two other funds earlier this week.

Other experts said it was "too early to call Armageddon" in the housing market.

"Fundamentally I think there's a fear factor and a liquidity concern: How quickly can I liquidate assets if I need to?" said Mr Nell.

On Wednesday, the Bank of England acted to calm the markets by giving banks more freedom to lend money, including to mortgage customers.

'Rush for the door' But that has not been sufficient to assuage concerns about property prices. Mr Nell said he believed commercial property prices would fall, but was not able to say by how much.

"I think there is a reason for them to fall. I think the pressure on rent will probably drop. I think tenant demand will fall off, broadly, for office space in London."

As far as the residential market is concerned, the Bank of England has voiced particular concern about buy-to-let investors, who represent 17% of borrowers.

But Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), played down such worries for the moment.

Speaking at a Rics conference, he said, "The concern at the Bank of England is that investors might all rush for the door at the same time. We might think differently in this room."

Share price collapse The latest Rics survey- taken before the EU referendum vote - suggested that prices were expected to fall anyway over the next three months, with house price inflation dropping to the low single digits by the end of the year.

"A period of slow house price inflation is no bad thing," said Mr Rubinsohn. "But my bigger concern is that we are seeing a slow-down in activity."

He also said he was concerned about the attitude of High Street banks, which have become increasingly reliant on mortgage lending.

"Will mortgage lenders want to lend, given they have so much lending already on their books?"

He is also worried about whether developers will slow down building projects, as a result of falls in their share prices. Shares in Persimmon, for example, have fallen 38% since the referendum.