Another SE London resider here, and as everyone else has already said, it's completely mental. we live in a nice 3 bed maisonette in (what was) a fairly unfashionable area of SE London. I had it valued last year at £325k which made me gasp, but having now had it valued in the last week at £450k, my flabber has been gasted! (I bought it in 2005 for £192k, granted it needed everything doing).
As others have said though, everything bigger has also rocketed, so it means very little in terms of trying to upsize to a house round here, which is what we really want to do as we have 2 DC now, and a really good primary school a stone throw away.
A 3 bed semi detached came on the market on Saturday a few doors down that would be absolutely perfect, however it is on for £750k (gasp) and I could see from our living room window yesterday swathes of people congregating outside for what I presume was an open house viewing.
We had been booked in to see it (even though we couldn't afford it..not sure why we were bothering!), but having seen the crowd I cancelled. The agents aren't int he slightest bit bothered as no doubt there will be an above-asking price offer or 4 on the table come Monday morning.
So..we are considering taking our money and running..to Brighton where you can in fact get a nice period 3 bed house for about 350k..I never thought Brighton would be affordable, but with London overheating it seems it may be doable.
Just have to get my head round leaving London as in my mind, once you go you can't come back (financially), and our area although once considered a bit 'rough and ready', is now gentrifying before my eyes thanks to be surrounded by posher bits (Dulwich, Crystal Palace, Herne hill), and the High Street is reflecting this with new coffee shops, a family gastro pub (finally!!!!) and a new leisure centre opening.
I kind of feel leaving now would be daft..auuugh decisions.