Low interest mortgages push up what people can afford, which contributes too.
But the housing crisis is fuelled almost entirely by investors, and seemingly many of those are foreign. They buy property in London because it's a relatively safe investment, recently it's been very high yield as the supply is nowhere near reaching the demand.
We need fast train services to places in the UK where the population is quite low. Then incentives to get business to set up shop there. Once the jobs are there, the people will follow. There is 20 times the amount of people in London, than there is in the northern counties (per sq mile) - we need to stop cramming everyone into the South East.
There are literally properties being built everywhere. Just take the overground to any direction and look around you. It doesn't make prices go down. There are too many people and too much money.
Prices are also down because of tax - sharp tax; which is a good thing in terms of dealing with speculation.
In any case I think that a three bedroom apartment is viable for a family, whereas a two bedroom apartment where one of the bedrooms is very small isn't really.