Figures for Q1 2016 put house prices in both Jersey and Guernsey below average prices for London for the first time.
According to Skipton International's House Price Index, the average house price in Jersey is now £443,442 – £22,562 below the London average of £455,984 – while Guernsey house prices average £422,331, up to £33,653 below the London average.
This is a reversal of the situation in Q1 2015, it reports, when house prices in Guernsey were £445,923 – up to £37,143 more than the London average of £408,729 – and house prices in Jersey were £436,865, up to £28,136 more than the London average.
Jim Coupe, Managing Director of Skipton International, said: "House prices in London rose dramatically from 2013 to 2014, narrowing the gap between London properties that had fallen a lot more in 2008-2009 after the financial crisis than Channel Island properties.
"House prices in Jersey and Guernsey and London converged towards the end of 2015. This is the first time average house prices in both of the Channel Islands have dropped below average house prices in London.
However, he added: "Recent figures show that transactions in both Jersey and Guernsey are up on last year."
House prices in the Channel Islands are still much higher than the UK average of £198,564, with average properties in Jersey costing £244,878 more, and properties in Guernsey £223,767 more than the average house in the UK.