It's a similar situation here in North Tyneside. We are seeing a very slow market at very low levels. However there are still some buyers. As there are no forced sellers the prices don't seem to be going anywhere fast. Can they hold until inflation kicks in? Maybe maybe not. It wont make much difference in 5 years time IMHO.
Inflation in houses won't kick in until velocity of money in the housing sector increases massively (look at how low volumes are), the only way given our present situation that that will happen is if lots of people could afford houses again and are willing to invest in property, the credit tap is now off so the only other thing that could happen is prices re-adjust to affordable levels.
In essence, it may not be possible for inflation to take off until money is flowing... and even then it has to flow into houses... and by then people may have been bitten in the ass by property and will be staying well clear.