Housing supply hasn’t decreased in london, but demand has.
Housing costs are driven by what people will pay, which is driven by salary, there’s always an option to not pay for housing in london - housing in Stoke is cheap, and not much further commute from Bloomsbury than say surbiton. Places like Luton are cheap and are a very respectable commuting distance, but people will pay far more for a house in Hackney
What people will pay is not driven by salaries, it is driven by how much bank will lend.
If tomorrow the banks offer a 1000-year loan you can pass on to your children, people will take it and single-bedroom apartments will cost 50 million plus.
Housing costs are driven by what people will pay, which is driven by salary, there’s always an option to not pay for housing in london - housing in Stoke is cheap, and not much further commute from Bloomsbury than say surbiton. Places like Luton are cheap and are a very respectable commuting distance, but people will pay far more for a house in Hackney