I think that London prices will still run a little higher, as there is more demand than supply, there has (historically) been inflation, and London salaries are higher ...

... this means a lot of people are sitting on houses where, even at the reduce prices in the market, the house "value" is well above the mortgage ... my house is still probably worth more than twice what I paid for it in 1997 (at the peak it was well over 2.5x) so (if I hadn't run up my debt elsewhere) I'd still have a £100k "deposit" to put down on the next house ...

... house prices will continue to drop, but then there's the reply to your other comment, there's a natural connection between rental prices and house prices and if rent is much more expensive than a mortgage, more people will look at buying ... and there's still limited rental properties (particularly in "nice" areas) so you'll still get the situation where, like my brother in Camden, a one bedroom flat costs more than £300/week in rent ... with the current interest rates that "sets" a buying price well above that £150k you mention.

If a "maximum" price of £150k for a 3-bedroom house in London comes back, I think we're back to house prices in the early 80s or earlier, if you're going to count Hampstead etc. ... but there are very desireable areas, and there are people sitting on large piles of cash (those who got out of stocks early enough, those with guaranteed final salary pensions, high earners etc.) so there's still going to be a premium for Bayswater/Hampstead etc. and so I think you probably mean a maximum average price across London ... or do you?

If a three-bed house in Hampstead was available for £150k, I'd buy it!