The boss of Britain's biggest building society has said the "frenetic" activity driving soaring house prices in the capital is starting to ease off.
Nationwide chief executive Graham Beale also called for the Bank of England to delay taking any action to cool the market for fear it could hit still-subdued price levels outside London.
Mr Beale made the remarks as the lender reported record underlying pre-tax annual profits which more than doubled to £924 million as gross mortgage lending rose 31% to £28.1 billion.
He said the record profits haul was not a one-off and the business was "firing on all cylinders".
But he said housing market activity in London was starting to ease off while elsewhere in the country prices remained 2% below 2007 levels - or 21% when adjusted for inflation.
"The market has gone from quite a frenetic state to a very busy state.
"I am a great believer in natural corrections. If house prices come up and up and up, there will come a point when people won't pay or they can't pay.
"I think there are some indications that we are starting to see that correction within parts of London."
There is widespread speculation that the Bank of England's Financial Policy Committee (FPC) will next month take action to cool the market, after deputy governor Sir Jon Cunliffe warned it was the brightest of "blinking warning lights" of risk.
The Bank has said lenders could be asked to restrict borrowing terms or forced to hold more cash on their balance sheets if it feels action is necessary.
However, latest figures show mortgage approvals falling and Mr Beale suggested waiting until October for a "more considered view" of how the market had developed.
"Whatever happens in London, we could get unintended consequences by starting to destabilise the rise in the housing market. It's an important aspect in the growth of the rest of the UK," he said.
Mr Beale said there were no plans to follow rival lender Lloyds in introducing a loan-to-income cap on those looking to borrow more than £500,000.
He said Nationwide had considered the impact of adopting a similar policy but found it would affect UK lending by less than 0.5%, and less than 1% in London.
"We have no plans to do it, although if there is a direction from the FPC, we will of course comply," he added.
Policy makers have already withdrawn the Funding for Lending scheme - designed to boost flagging borrowing - from the housing market. Meanwhile, new mortgage rules introduced last month mean buyers are probed in more detail about affordability.
Mr Beale said: "I would allow the housing market to go through its cycle. We have had a lot of things going on and I think it's important to allow that to consolidate and then take decisions as necessary."
Nationwide's results for the year to April 4 show it helped 58,100 first-time buyers, a 37% increase, while more than 430,000 new current accounts were opened, a rise of 18% on last year. Deposit balances grew by £4.9 billion.
Mr Beale said the building society had "played a leading role in the housing market". Its own most recent figures showed prices rose by 10.9% year-on-year in April.
Latest data from the Office for National Statistics showed London prices rising by 17%, compared to a UK average of 8%.