Nationwide is set to launch mortgages that allow young people to get on the housing ladder by using wealth tied up in their parents’ or grandparents’ property.

Bosses at the building society said they wanted to make it easier for relatives to pass on cash to first-time buyers.

And they also pledged to help older people release money from their homes to ease financial worries in retirement.

Nationwide unveiled the plans yesterday as it announced a 23 per cent rise in profits to £1.3billion for the year to April

Chief executive Joe Garner said he felt Nationwide was in a strong position – and pledged to keep branches open wherever possible.

Former BT executive Garner, who took over last month, said: ‘I don’t expect the number of branches that we have to change dramatically in the near future.

‘I passionately believe in branches and the people in them.’

Nationwide members deposited an extra £6.3billion with the society during the year, taking its total to £138.7billion.

This was despite what it called ‘strong competition’ from government-owned provider National Savings and Investments, which has been offering saving rates significantly better than the private market.

But Nationwide’s profit boost was driven chiefly by a growth in mortgage lending. This has surged to a higher level than before the Great Recession.

The building society had a 13.7 per cent share of the market during the year, with £32.6billion of residential mortgage lending – up £5.5billion on the previous year.

It has also increased the age at which mortgages must be repaid from 75 to 85 in recognition of Britain’s more elderly population.

But in this increasingly-heated market, Nationwide is concerned younger buyers could struggle to realise their dreams.

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