OP, It is very likely that the explanation is simple.
The house was advertised at 220k, either because the estate agent and the owner thought that was the value, or they wanted to generated interest by advertising it a bit low.
Two or three people have seen it and bid on it. The current bid is now 250k. No-one updates the ad when in the middle of active bidding o say current bid is now ...... The house will either sell for +250K in the next few days, or the bidders will not get mortgages and the house will then be available at a lower price in a few weeks. You saw the house a bit too late to see it and get involved in bidding. If a house is popular, things can move quickly. If the estate agent is lying, the house will still be for sale in two weeks time and you can consider it then. If the owner wants 250K, there is nothing you can do about that, except offer what you think the house is worth and hope for the best.
Buying a house is stressful and you can expect things like this to happen a lot.
There are lots of houses out there, get back up on the horse and keep looking, Hopefully, your dream house at a good price is out there somewhere.
Good luck.