Property prices have been rising for years and went into orbit due to the effects of the Covid pandemic. Some lenders reported the first signs of that trend reversing last month, and today’s record hike in interest rates by the Bank of England will kick this into a higher gear. As prices drop – by as much as 15 percent next year, according to some money boffins – mortgage payments will continue to rise.Many would say it’s a re-balancing act that is long overdue. The 21st Century has seen two major property booms. The early years of the new millennium were characterised by financial prosperity and a resulting housing free for all.100 percent mortgages and even cashback offers to entice buyers were far from uncommon. ‘Fill your boots’ was the gist – and many did.The global crash of 2008, sparked by the subprime mortgage crisis in the United States, stalled this. Millions of people lost properties and racked up hefty debts.But recovery happened and the numbers started to increase again – in some areas by up to a quarter over the past two years. Property prices have been rising for years and went into orbit due to the effects of the pandemic (Image: GETTY)That financial meltdown more than a decade ago meant that securing a mortgage loan is no longer such a laissez-faire arrangement.Lenders want to know if you can afford to pay it back, and this week’s developments will only tighten the screw on those looking to buy.It’s true that the new regulations allow more room for prices to fall. Tumbling into negative equity – where you owe more than you own – is far less likely.But it also means that while falling market values will bring property within reach of buyers across the scale, getting a loan agreed will be much, much tougher.There is also the question of availability. The UK economy is hugely influenced by the property market, with a third of household wealth tied up in the value of our homes.So if interest rates remain high fewer people will be looking to sell up and stretch themselves with a new home purchase.Instead they’ll be making savings where they can and sitting tight, looking to ride out the fiscal storm.Amongst the chaos of Liz Truss and Kwasi Kwarteng’s disastrous mini budget, there is some better news.Whereas a month ago there were widespread predictions of interest rates topping six percent next year, the more popular estimate is now under five percent.But let’s not get carried away. The era of cheap debt that drove the property boom is well and truly over.Those prices that went up and up are now having to contend with gravity.Terry Fisher is a property expert at We Buy Any Home, the UK’s leading home buying service, with a guarantee to purchase any property, provide a cash offer in minutes and settle funds in just seven days.For more information, visit webuyanyhome.com