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Nationwide is launching a new mortgage that allows families to raise funds from their existing property to help another family member buy a home.

The flexible Family Deposit Mortgage is aimed at relatives looking to support one another, such as homeowners helping their children to take their first steps onto the property ladder. It is also available to help those moving to a new home as well as relatives looking to assist older parents.

Both existing Nationwide mortgage members and those remortgaging to the Nationwide from another lender can apply for the Family Deposit Mortgage to raise extra capital for a family member. 

The buyer receiving the funds must take out their own mortgage with Nationwide, selected from any product in the standard mortgage range.

According to Nationwide analysis, a significant proportion of new mortgage lending involves a deposit that is wholly or partially gifted.

The average first time buyer deposit in the UK is £28,200, rising to £65,600 in London, while 35 per cent of first time buyers currently opt for a mortgage term of more than 30 years to spread the cost.

All of the additional monies raised must be provided as a fully gifted deposit. 

Those with no current mortgage on their homes, and those in receipt of retirement income, can also make use of the Family Deposit Mortgage to raise deposit funds.

Those gifting the deposit to the buyer can access up to a total mortgage borrowing of 80 per cent loan to value (LTV).

Meanwhile the large proportion of people borrowing from ‘the bank of mum & dad’ was backed up the Social Mobility Commission this week, citing that 12% of existing property owners are benefiting from a gift or loan from a family member, rising to 34% for first-time-buyers.

The SMC goes on to say that this passing of wealth is a barrier to social mobility - those without family members with property-equity to pass on failing to get on the property ladder at all.

It says that among people 25-29, home-ownership has fallen from 63% in 1990 to just 31% today.