This chart, from Morgan Stanley, is the final nail in the coffin of Britain’s post-2008 crisis property boom. It shows three separate indices that measure major movements in UK house prices. They are all heading to zero or going negative: The green line measures prices in “prime central London,” the area mostly inside Zone 1 were only the very rich can afford to buy. Normally, you can ignore this measure as it only affects the 1%. Ordinary people cannot afford to live in Mayfair or Chelsea, and the amount of housing inventory in those areas is a tiny fraction of the British market.

That line does broadly follow growth in the market as a whole, however, and right now it looks like the canary in the coal mine. Prime central prices have collapsed, and general market UK house prices are following them down. (We’ll explain why later.)

Property construction data show something similar. These data are indices of construction companies’ work intentions, compiled by Pantheon Macroeconomics. Apparently, construction in the UK is going into a slump:property

Foto: sourcePantheon Macroeconomics

So what happened?

The government increased stamp duty last year on sales of second homes and buy-to-let properties. In one fell swoop, it seems to have cooled the entire market. This is Morgan Stanley’s research again:property

Foto: sourceMorgan Stanley

The stamp duty change in 2016 seems to have punctured price momentum in London, and in the national market as a whole.

On the one hand, that’s good news. It means political activity – government intervention in this case – can reduce prices without a repeat of 2008. It also means that fewer buy-to-let landlords are snapping up properties in the UK, leaving more stock for ordinary people to buy and live it.

On the other hand, it suggests the market is sensitive to whatever government activity lies ahead, including Brexit in 2019, the EU trade deal that follows, volatility in sterling, the Bank of England raising interest rates, and maybe even Scottish independence, if SNP leader Nicola Sturgeon gets her way.