House prices have risen because of government policies which have been around for years, Help to Buy, ultra low interest rates and stamp duty holidays being the main drivers.
It is clear to me that there will indeed be a reckoning. I am of the opinion that anyone buying a home now is buying at the very top of the market, although I have thought than for a few years. However, this time the governments around the world are devaluing their currencies through QE and a rise in inflation is a real danger. CPI inflation in USA doubled last month to 4.5%.
There is talk of a danger of seventies type inflation in the UK (15%-25%) Can you imagine that?
If inflation rises, interest rates will have to rise, perhaps to normal levels perhaps even nearing 10%.
So those that have over extended themselves will be needing to make mortgage payments up to ten times what they are now, in a time when jobs will be being lost and a recession.
A great many will be repossessed by lenders flooding the market with homes that cannot be sold or bought. Prices will crash perhaps by 30% from today's levels.
But as it stands, all the talk is on getting on the ladder (via government subsidies) creating a bubble which is fuelling a fear of missing out in those that don't think.