For anyone who wants to escape the rat race and has money in the bank, the economic storm clouds have a sliver lining. The ultimate retreat, a private island, is becoming more affordable as sellers from the Caribbean to the Clyde slash prices.

The cuts follow two decades in which many islands increased sharply in value as the economy boomed. Richard Branson bought Necker Island in 1979 for £180,000; today, his Caribbean retreat is valued at more than £50million. “It is a question of supply and demand,” said Farhad Vladi, a property agent based in Germany who set up Vladi Private Islands 30 years ago. “Over the past 20 years, demand for private islands has grown steadily, while the supply remains the same. “This meant that more and more people began buying up islands as investments, rather than as homes. “Now, thanks to the financial crisis, these same speculators are having to bring their over inflated prices down to reflect the real value of the islands.”

There are about 80 islands around Britain that Mr Vladi considers to have a “significant” value. Little Cumbrae, a 684-acre island  one mile off the Ayrshire coast in the Firth of Clyde, was put on the market three years ago for £3million. The asking price has now been slashed to £2.5million. Steven Worrallo bought the island as an investment seven years ago. He planned to build luxury marinas and holiday homes and turn Little Cumbrae – which includes a 13th-century castle, a 12-bedroom baronial mansion and an 18th-century lighthouse – into a celebrity getaway. Meanwhile, Shore Island in the Shannon Estuary, south of Galway Bay and only three miles from Shannon Airport, went on the market for a million euros two years ago. Today the 30-acre retreat that rises to 100 feet at its centre, with a well and the ruins of a house, is available for 900,000 euros.

According to Mr Vladi, outside Western Europe the most popular islands are in the Caribbean and the south Pacific. “The credit crunch will mainly affect ‘secondary islands’, which were bought for speculative purposes, mainly in Central America, South America and the Indian Ocean,” he said. Two years ago, the 99- acre volcanic Isle of Majagual, off Panama’s Pacific coast, was on sale for £3million. A year later that was reduced to £2million. It is now £1million. “People who want to buy an island generally look for solitude, tranquillity, privacy and a place away from the everyday routine,” said Mr Vladi. “The financial crisis means that this dream has become that little bit more affordable.”