Retired parents are taking out mortgages that will continue after their death and be inherited by their children, industry experts have claimed.
Several mortgage advisors and brokers have said that the trend is becoming increasingly common.
Thought by many to be yet another sign of a booming property market, with prices rising by up to 10% recently, it is another way people are trying to help their children get onto the property ladder.
A growing number of properties are also being purchased in a joint partnership between parents and children. The child takes up sole ownership when their parent passes, if they meet the qualifying criteria of the lender at the time of death.
The news comes as the Bank of England announced that the number of high-risk mortgages being agreed is on the increase. For a mortgage to be classed as higher-risk, the buyer has a deposit of less than 10% and has a loan of more than 3.5 times their annual salary.
According to the Bank, the rate of lending in this area has grown in the first quarter of 2014 and is now at its highest point for more than five years.
There are also fears in the industry over maturing interest-only mortgages with a nearly a third of all holders failing to respond to correspondence about repaying their loans from 2020.
Aimed at reducing the number of toxic loans, the Council of Mortgage Lenders has said that just 30% have replied with details of their repayment plans.
