After disappearing from the UK market following the house price slump in 2009, we hear a small shout that the 100 per cent mortgages are back in business!

Following on from many of the small lenders starting to offer 100 per cent mortgages in their local areas, Aldermore is now offering a deposit-free mortgage across England and Wales.

It's wrapped up in the 'Family Guarantee Mortgage' which is created for borrowers who don't have sizable cash deposits. Instead, parents, step-parents or grandparents will have to provide a guarantee secured against their own property for the first 25 per cent of the loan.

'Many first-time buyers have become frustrated from the housing market because of the large deposit demanded by most of the high street and financial lenders. We believe this is the single biggest issue facing first-time buyers and it needs to be addressed head on if the UK's housing market is to have a chance of recovery,' says Charles Haresnape, managing director of residential mortgages at Aldermore.

The "guardian" guarantee put up by relatives can be repaid at any time or be released if the loan to value (LTV) on the property falls below 75 per cent. The guarantee period is limited to only 10 years, at which point it will expire unless the LTV remains above 75 per cent.

The new 100 per cent mortgage is available on a repayment basis only – so you can't just pay off the interest on the loan – and the maximum loan size is £250,000. Borrowers must be at least 25 and have a spotless credit record.

The concern here is that, as with all 100 per cent mortgages, house prices only have to drop slightly for you to end up in negative equity. More worryingly, if you fall behind on your mortgage payments your parents could be at risk of losing their home too. It's good news though for the industry, we are certain that more banks, lenders and financial institutions will follow suit over the new few months.