I think this is especially true of the lower league clubs (smaller wages).The transfer market is analogous to the London housing market where spiralling costs and limited availability mean the number of potential buyers is reduced.
With football pricing out all but a few clubs may be a deliberate policy. Palace might not be at the Old Kent Road /Whitechapel end but we're certainly not looking at Park Lane.
Nearly said looking at Mayfair but that might be misconstrued.
Charlton fans have been complaining about their wage bill being higher than equivalent clubs elsewhere. Well if you play oop North the cost of living is lower so anyone moving to London wants to add a SE premium.
I'm not sure it's the driver for PL players more likely it's the competition:
Arsenal
Spurs
Chelsea
Fulham
Brentford
Palace
Wet Spam
Brighton
Bournemouth
And a few Championship clubs all in the SE catchment area and ready to compete.