I agree that the overpopulation of the South East is a Bad Thing - for the rest of England, the rest of the UK, and probably for the South East itself.

However, I think it would take more extensive social engineering than just failing to build houses to prevent the lemming-like rush to live/work/do business there. Lack of housing, while the other pressures to go there remain, will just result in slum conditions.

You need to move significant parts of government and business out of London to make that kind of change. Difficult.