An Englishman's home, the phrase goes, is his castle. But this old adage has recently acquired a new meaning as British citizens have turned to property to provide not only physical, but also financial security. In the last decade, bolstered by consistent economic growth, house prices have soared; the average home now costs £210,000 or six times the per capita gross domestic product figure of £35,000 (around \8,000,000). This compares to an average of five times per capita GDP since World War II, or only four times during the recession of the early 1990s.

But this security may not last. For the first time in years, July's figures showed a slight fall in house prices. This, coupled with fallout from the collapse of the subprime mortgage market in the United States, has led commentators to speculate that the boom may be over.

For such commentators, the story of Japan's boom and bust seems a portent for the future. The legendary economic boom of the 1980s was fueled in large part by speculation in property and land. The total value of property in Japan reached £10 trillion in 1991. After a crash and 15 years of recession or minimal growth, its value today stands at about half of that.

But there are problems using the Japanese experience as a guide to what may or may not happen in Britain. Land speculation in Japan in the '80s was fueled by a simple assumption: This was a small country, with only a limited amount of habitable land — thus, according to the laws of supply and demand, the value of that land would inevitably rise. But the falling birthrate called this logic into question. By the '90s, it was apparent that the Japanese population would not grow forever, and that, therefore, demand for land would not continue to spiral. The result, when the government finally allowed interest rates to rise, was a collapse in confidence, the effects of which are felt in the economic stagnation that continues to this day.

Britain, like Japan, is a relatively small country. And rising house prices have been driven, in part, by the scarcity of available property: as in Japan in the '80s, demand exceeds supply. The elderly are living longer, so their houses are not being released onto the market, making it difficult for young people to climb onto the property ladder. But as in Japan in 1991, interest rates have risen sharply this year. And British Prime Minister Gordon Brown has pledged to build some 240,000 houses annually, a policy likely to ease demand. These factors suggest to some that the boom is coming to a head, and that a Japan-style crash is likely.

But the similarities are perhaps less striking than the differences. The British birthrate, like that of most developed countries, is low, but not so low as Japan's. And the population of the U.K., much more than that of Japan, is being swelled by immigration, traditionally from Commonwealth countries, more recently from the former communist states of Eastern Europe. Nor is growing population the only factor fueling demand for property in Britain. Second home ownership, once the exclusive preserve of the rich, is now within the grasp of many middle-class earners. Similarly, buy-to-let schemes are allowing many to earn a lucrative second income as landlords. The spiraling prices of the last decade have been in part a symptom of an era in which many are not content with owning only one home.

The unfortunate consequence of this is that a new class divide is developing in Britain — between those who are able to buy and own property, and those who are not. Middle-aged people who have seen their assets grow in value over the past 30 years now worry about whether their children will be able to follow them onto the property ladder. For those on low or even average salaries, the costs are essentially prohibitive. This leaves us dependent on external support: Many of my generation, including myself, can afford to buy only through parental generosity, or in partnership with a friend. For those not fortunate enough to be able to count on prosperous elders or contemporaries, the chances of doing so are becoming negligible.

In this light, anxiety about a prospective crash may well be misplaced. For the financially vulnerable young, indeed, the end of the boom may be the best thing that could happen.

Alexander Jacoby is a British film critic and writer who lived in Japan from 2002 to 2005. He is currently writing a handbook of Japanese film directors and pursuing doctoral studies.