The higher interest rates go, the more house prices will fall. Yet the BoE under governor Andrew Bailey is still expected to increase bank rate by another 0.25 per cent to 5.5 percent at its next meeting on September 21. This could finally tip the property market over the brink.

Latest figures from home buying portal Zoopla show property transactions have plunged by more than a fifth this year, taking us back to 2012 levels. 

While cash buyer sales hold steady, there has been a 28 percent drop in the number of people buying with a mortgage as interest rates soar.

Separate figures published today by the Bank of England also show the mortgage crunch intensifying.

More than 1.6million homeowners whose fixed-rate mortgage deals are set to expire this year face a sharp increase in repayments.

Nearly a million homeowners face paying £500 more interest every month.

Many simply cannot afford it as the cost-of-living crisis pushes up prices across the board at a time when people are paying the highest tax rates in 70 years.

Zoopla executive director Richard Donnell reckons mortgage rates need to fall below five percent before people are ready to start moving homes again.

He predicts house prices will fall 22 percent in total by 2026.

Prices have already fallen by 4.5 percent since last August's peak, according to Nationwide. The process is accelerating, with prices falling at the fastest annual rate for 14 years in July.

First-time buyers don't stand a chance. Nationwide's chief economist Robert Gardner reckons the typical first-time buyer with a deposit of 20 per cent would see mortgage payments account for a staggering 43 percent of their income.

That’s up from 32 percent a year ago and is likely to rise even higher in the months ahead.

The only way to get on the property ladder today is with help from the Bank of Mum & Dad, which now funds almost half of all new property purchases.

Estate agents are getting desperate with some calling for the government to support the housing market, perhaps in the shape of another stamp duty holiday.

I doubt that's going to happen.

By constantly propping up the market with schemes such as Help to Buy, the government has helped push prices to today's unsustainable highs.

The BoE is even more culpable. By keeping interest rates artificially low for years it created a false market and burdened borrowers with outsize debts.

Now it's hiking rates with abandon, and puncturing the property bubble it created itself. It's got an awful lot to answer for.

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Incredibly, the BoE seems reluctant to stop, even though there are clear signs that the economy is starting to slow.

In my view, and the view of many economists, hiking rates even higher from here will do more harm than good.

Interest rate hikes take up to 18 months to feed through to the economy, only to land with a bang. We’re reaching that point now.

Lenders have been cutting mortgage rates in recent weeks but that trend will reverse if the BoE simply ploughs on.

More people will lose their homes, jobs and businesses if it doesn't wake up to the danger.

It's time for Bailey to take a breather and see whether his policy is working. As house prices slide, it looks like he's already done enough damage.