House prices look set to continue falling as homeowners face an increasingly “grisly” future of cripplingly high mortgage repayments, an economics expert has warned.

Ed Conway said that the crisis has already hit the UK and that some will soon find themselves in the biggest mortgage squeeze since 1991.

He warned that we could once again face a “mammoth housing crash” or recession that even dwarfs the global financial collapse of 2008.

He tweeted: “UK money markets now pricing in Bank of England interest rates of 5.75% by early next year. That’s a massive change from only a month ago, when they thought rates might peak under 5%. Things looking increasingly grisly for mortgage payers/the housing market.”

Conway, who is the economics editor of Sky News, detailed the trend of the interest rates and how it is going to impact the mortgage pattern for homeowners.

As mortgage rates close in on 6%, he said: “It’s not totally implausible that the squeeze for those with mortgages could actually be WORSE than in the 1990s.”

The Bank of England (BOE) interest rates level is expected to increase to 5.75%, which is higher than previous expectations of interest rates peaking at 5%.

The continuous upward trajectory depicted by the interest rates since 2021 has led to the highest mortgage rates the market has seen since the financial crash of 2008.

Conway continued: “Right now, based on rates currently available, those refixing or taking out new loans are entering the biggest mortgage squeeze since 1991.

“This is not a projection. It’s happening RIGHT NOW. NB the ’91 mortgage squeeze contributed to a mammoth housing crash/recession.”

Conway further warned that the mortgage rates are likely to increase in the coming years.

He tweeted: “But the problem is, today’s available rates don’t yet reflect the ever increasing expectations for the official Bank of England rate.

“Which is expected to rise a further percentage point! Eg quite a lot! So actual MORTGAGE rates are almost certainly going to go even higher.”

Yesterday, Jeremy Hunt said that the UK has “no alternative” but to hike interest rates in a bid to tackle rising prices.

The Chancellor said inflation – the rate at which prices rise – was the “number one challenge we face”.

He said the government would be “unstinting in our support” for the Bank of England “to do what it takes” to slow inflation.

Foxtons chief tells sellers to ‘get a little bit more competitive with pricing’