* Henderson, Threadneedle, Canada Life funds suspended
* Follow M&G, Standard Life Investments, Aviva Investors
* Financial service complaints body says 'troubled'
* GRAPHIC - Major UK property funds http://reut.rs/29ig4Lf (Adds temporary suspension by Aberdeen Asset Management)
By Simon Jessop, Carolyn Cohn and David Milliken
LONDON, July 6 (Reuters) - The number of British propertyfunds suspended after the country's vote to leave the EU morethan doubled on Wednesday, leaving over 18 billion pounds ($23billion) frozen in the biggest seizing up of investment fundssince the 2008 financial crisis.
Seven funds have pulled down the shutters after a wave ofinvestors asked for their money back amid speculation about apossible drop in commercial property prices in reaction to theresult of the June 23 referendum.
That in turn has raised concerns about the outlook for thebroader financial system, given the risk of investors bailingout of other asset classes in a panic and of lenders to thesector such as banks suffering fresh balance sheet stress.
Henderson Global Investors, part of Henderson Group, said on Wednesday it had temporarily suspended tradingin its 3.9 billion pound UK Property PAIF and PAIF feeder fundsdue to "exceptional liquidity pressures" given uncertainty afterthe Brexit vote and the other suspensions.
It was followed within the hour by Columbia Threadneedle,part of the Ameriprise Group, which said it hadsuspended trading in its Threadneedle UK Property Fund.
Canada Life said it had also suspended its Canlife Propertyand Canlife UK property funds, describing this as a deferral ofrequests to withdraw investments. "The deferral can be for up tosix months, enabling the funds to ensure property values reflectmarket conditions," it said in a statement.
Late on Wednesday, Aberdeen Asset Management saidwithdrawals from its 3.2 billion pound UK Property Fund which ithad received before 1100 GMT would face a 17 percent dilutionlevy, and that it would not fulfil later orders. It expected tore-open the fund at 1100 GMT on Thursday.
They joined rival funds managed by M&G Investments,Aviva Investors and Standard Life Investments which suspended trading on Monday and Tuesday.
BlackRock Inc, the world's largest asset manager, onFriday told investors that it raised quarterly redemptioncharges on its 3.3 billion pounds BlackRock UK Property Fund to5.75 percent, from 2 percent.
"Over half of the property fund sector is now on ice, andwill remain so until managers raise enough cash to meetredemptions. To do that they need to sell properties, and as anyhomeowner knows, that is not a quick or painless procedure,"said Laith Khalaf, senior analyst at fund supermarket HargreavesLansdown.
"These funds are therefore likely to be closed for weeks andmonths rather than simply a matter of days," he wrote in a noteto clients before Aberdeen's announcement.
Britain's Financial Ombudsman Service said it had begun toreceive calls from retail investors worried about the closuresand the potential hit to their savings. "Although the decisionto suspend redemptions was expected, the extent of thesuspensions by the three funds so far is quite troubling," aspokeswoman said shortly before Wednesday's fund announcements.
Keenan Vyas, Director in the Real Estate Advisory Group atDuff & Phelps in London, said the consequences could beprofound.
"If there continues to be a tremendous amount of redemptionpressure in a short period of time this could result in a largenumber of sales transacting below book value and an eventualoverall correction in property asset pricing across the UKmarket," said Vyas.
BANKS
Despite concern that the banking system - beset for years bytoughening capital constraints and misconduct fines - could facea fresh hit from any write-down in commercial property, analystswere generally sanguine as total exposure was light.
"Banks haven't really played the asset class in the lastfive years - it's mostly been the shadow banking sector," saidanalysts at Bernstein in a note.
British banks held about 90 billion pounds of the 183billion pound commercial property loan market at the end of2015, according to research by De Montfort University.
RBS had the most exposure at 25 billion pounds or 5percent of its assets, followed by Lloyds Banking Group with 18 billion (2 percent of assets) and Barclays at 11 billion (1 percent), according to Mediobanca Securities.
Officials said that banks are better placed than in 2008 towithstand falling real estate values, having reduced theiroverall exposure and increased capital reserves
"One of the things the PRA (Prudential RegulationAuthority)has done over the years is to ensure that the exposureof UK banks to commercial property has been kept quitemanageable... This is not a big issue for UK banks," Bank ofEngland Governor Mark Carney said on Tuesday.
Concerns that the UK upheaval could spread to Germany,Europe's other big real estate investment market, were alsooverdone, with no increase in demand to redeem there, saidmanagers at Deka and Union Investment, among others.
As well as being better diversified, with UK property makingup no more than 20 percent of most German funds' portfolios,retail investors are also prevented from getting theirinvestments back for 12 months.
While UK funds still had daily dealing, the FinancialConduct Authority's Chief Executive said he was keen to lookagain at the inherent liquidity mismatch given property is toughto sell quickly.
Britain's fund trade body reiterated on Wednesday that thefunds need to review their suspensions every month. "The managerand depositary are under a duty to ensure that the suspension isonly allowed to continue as long as it is justified havingregard to the interests of unit-holders," it said.($1 = 0.7731 pounds)
(Additional reporting by Huw Jones, Kathrin Jones, LawrenceWhite, Anjuli Davies, Trevor Hunnicutt and David Milliken;Editing by Rachel Armstrong, Mark Potter, David Stamp and JaneMerriman)
