FIRST-TIME buyers are increasingly relying on their parents to help them get on the property ladder, says a new report.

A survey by high street mortgage broker Bradford & Bingley has found one in six first-time buyers 16 per cent of the market have either borrowed or were given money by their family to pay for the deposit.

In addition, ten per cent are buying their property in conjunction with their family and nearly one in ten eight per cent will rely on their family to cover all costs associated with the purchase, such as stamp duty and furniture.

However, with many people concerned about the size of their pension pots, parents will find it harder and harder to give their children big cash sums, says the lender.

Duncan Pownall, who is Bradford & Bingley's mortgage development manager, said: "Now though, there are a number of ways that parents can help which won't affect their retirement years."

The mortgage options include:
Guarantor mortgages parents can help their children on to the ladder by guaranteeing their mortgage payments. Bradford & Bingley's research shows one in five already use mum or dad as a guarantor on their mortgage. On a general basis, the parents' income has to be sufficient to cover all their own debts and their child's mortgage. Lenders also commonly require a 25 per cent deposit.

Variations on guarantor mortgages as the market has evolved some lenders have become more flexible, requiring a smaller deposit and only needing parents to be able to cover the amount above their child's borrowing. Examples of such lenders include Royal Bank of Scotland and West Bromwich.

Bank of Ireland's First Start mortgage This is a joint mortgage between parent and child or a close relative and child. Available to 100 per cent LTV. Choice of property ownership joint or sole. The lending decision is based on adding the parents' income multiplied by four taking existing commitments into account to the child's income.

Offsets A parent can put their money into a relevant savings account and offset it against their child's mortgage. That way they can help reduce the interest payable on the mortgage but still retain access to their money if and when they need it.

Mr Pownall said: "The mortgage market has increasingly responded to the plight of first time buyers and designed specialist, flexible mortgages to help them on to the property ladder.

"We estimate around ten per cent of first time buyer mortgages are guarantor-style."