Let’s talk house prices.

There’s always a plethora of house price surveys being published. The most recent addition was from Halifax, which suggested that UK prices saw a pick-up in growth again to 2.3% in the three months to October. Annual price growth edged up from 4% to 4.5% in September. So, while hardly earth-shattering growth, a steady rise, driven, as I consistently argue, by a shortage of supply, low mortgage rates and a high employment rate.

So far, so predictable. More interesting is what’s happening to house prices in the capital and why this remains a geographically discreet niche market.

Since 1990, the price of an average house in London has tripled in real terms. However, that strong and consistent growth has been under fire. One pocket of weakness is London’s prime market. According to a recent report by Savills, prime prices are now 15% below their peak three years ago. Why this dramatic change? Well, our old friend Brexit certainly has something to do with it. Many people are worried about what London’s status will be post-exit. Some magnates have already left while others are happier to rent rather than buy, according to Savills.

House price growth in London has slowed dramatically from a peak of 14.8% in March last year to August, according to the Land Registry. KPMG said that the capital’s housing market has been hit ‘disproportionately hard’ by changes to stamp duty, which caused a significant rise in transaction costs for homes above £937,000. Analysis by the accountant suggested that uncertainty surrounding the outcome of Brexit talks had ‘probably reduced the appetite of some international investors’ – an important driver of the London property market. Around a third of sales of newbuilt units is handled by international estate agents for overseas buyers. London boroughs with high levels of EU-born residents might be vulnerable to sharper house price corrections in the aftermath of Brexit, too, as demand weakens amid lower inward migration.

Yet changes to financial regulation may have the biggest effect on demand in the London market. With prices in the capital remaining disproportionately high, many people have only been able to get a foot onto London’s housing ladder with the aid of a substantial mortgage. In 2014, over 20% of buyers in the capital took loans worth at least 4.5 times their income, up from around 5% a decade ago and double the rate for Britain as a whole. New rules to bolster financial stability have dissuaded banks from lending too much at big multiples – and that’s what you need when prices are so out of kilter with the rest of the country. Unsurprisingly, since then first- time buyers have slumped by over a tenth in the capital, while rising elsewhere.

KPMG said house prices in London will continue to cool and the pace of growth will not recover above 5% for the next three years. The accountancy group said that the housing market had been hit by changes to housing policy and economic developments that ‘call into question the sustainability of current relatively high valuations in the capital’. And others agree. JLL, a property firm, expects annual house price growth in the capital of around 2% for the next five years.

So, while the rest of the country continues to enjoy rising prices, supported by ‘external factors’ according to the Halifax, London remains in splendid isolation. And while Brexit uncertainty remains, I can’t see the London market returning to ‘normality’. KPMG concurs with my view that the London housing market will ‘see a continued cooling in the short term, followed by a gradual rebound in the medium term’.

It’s been pointed out many times that London effectively has its own economy, more dynamic, more forward-looking and more entrepreneurial than that of the remainder of the British Isles. Londoners have understandably patted themselves on the back, glowing with pride – and possibly a hint of superiority – at the success of their endeavours. Now, perhaps, like a Hollywood mogul whose past has caught up with him, we are seeing the inevitable down-side of that Oscar-winning economic performance.