Lloyds Bank has announced a new 100% mortgage for first-time buyers – as long as they have a family member to bolster the loan.

Buyers will be able to borrow up to £500,000, with no deposit, thanks to the bank’s three-year ‘Lend a Hand’ deal. The mortgage is part of a £30 billion commitment by Lloyds to helping first-time buyers.

Research by Lloyds found that buying a home remains the number one goal for people under 35. But, for half of the people surveyed, saving for a deposit is the biggest obstacle to achieving their dream.

In addition, 41% of parents want to help their children onto the property ladder but are concerned that they may need their cash in later life.

The 2.99% fixed-rate deal requires a parent, grandparent or other relative to pay 10% of the property’s value into a Lloyds savings account. Lloyds will pay interest at 2.5% on the money deposited, but the family member will be required to leave it in the account during the three-year period of the mortgage.

The idea is that parents can help their children buy their first home, while keeping hold of savings, which they may need later. It follows the introduction of a similar ‘Family Springboard’ mortgage from Barclays.

Such deals have led to fears that they reinforce a two-tier system among first-time buyers, which places those with access to the ‘bank of mum and dad’ at an advantage.

But Vim Maru, from Lloyds Banking Group, stressed the positives: “We are committed to lending £30 billion to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and ‘Lend a Hand’ is one of the ways we will do this.

“At the heart of this market-leading product is helping to address the biggest challenge first-time buyers face getting on to the property ladder, while rewarding loyal customers in a low-rate environment.”

Read more about this story in The Guardian.