A crash in the housing market “seems inevitable”, according to a director of a mortgage firm.

Homeowners face another increase to payments tomorrow as the Bank of England is expected to raise the base rate as inflation remains stubbornly high.

Latest figures from the Office for National Statistics revealed that the pressure on households from the rising cost of living did not ease last month, with inflation remaining at 8.7 per cent in May.

Jamie Elvin, director of Hove-based Strive Mortgages, warned of a “ticking time bomb” for more than one million mortgage holders in the coming months.

He said: “The challenge of tackling inflation has been massively underestimated by the government.

“Now, it is over to the Bank of England to react, which will almost certainly pile further misery on borrowers as rates go up again.

“It’s the perfect storm right now and the future feels bleak. Expect the base rate to rise to 5.5 per cent or 5.75 per cent by the end of the year.

“It’s a ticking time bomb as 1.4 million borrowers will see an end to their low fixed rates this year and the impact will be beyond words.

“I fear for the property market, and a crash seems inevitable at this point.”

MOST READ:

It comes as experts warned that a further rise in mortgage rates tomorrow looks “inescapable”.

Suren Thiru, economics director at the Institute of Charted Accounts in England and Wales (ICAEW), said: “While core inflation is proving troublesome, the painful squeeze on consumer spending from soaring mortgage costs and higher taxes should soon put it on a downward path.

“Although another interest rate rise on Thursday looks inescapable, further tightening will do little to address current inflationary pressures and instead risks deepening the financial pain facing people and businesses.”

Chancellor Jeremy Hunt has ruled out offering financial support to homeowners and said such schemes would “make inflation worse, not better”.

He is expected to meet lenders on Friday to urge them to support customers struggling with rising costs.

He said: “We know that there is enormous pressure for families’ mortgages and it’s a really big deal for family finances.

“The one thing that would not help those families is to step in with short-term support that meant inflation stayed higher for longer and those mortgage rates stay higher for longer.

“I am meeting the mortgage lenders later this week to ask what else can be done to relieve pressure in very difficult times, but we won’t do anything that means high inflation stays around for longer because that is the root cause of the pressure.”

Figures released from the Office for National Statistics also found that the UK’s debt pile reached more than 100 per cent of economic output for the first time since 1961.