Being of sound mind I leave you ... my mortgage payments

It has been dubbed the "deathbed mortgage". Yesterday a building society began selling a home loan that lasts so long it will be passed from parents to sons and daughters. Kent Reliance said it plans to let home buyers take out an interest-only mortgage where the repayments on the loan are passed from one generation to the next.

The low-cost mortgage - the society says it will typically reduce payments by £150-£170 a month - will enable cash-strapped borrowers to afford the crucial first step on the property ladder. Critics say the loan will turn into a life sentence, with buyers paying a mortgage all the way through their retirement - and still leaving later generations to pick up the bill.

Kent Reliance's new mortgage comes amid heightening concern about the crisis of affordability in the housing market. Yesterday the Royal Institution of Chartered Surveyors (RICS) said the costs of becoming a home owner were at their worst for 20 years - and would get even worse over the next few years.

In a new measure of property costs, RICS said that the "accessibility" costs of home buying (which include paying for a deposit and stamp duty) are four times higher than 10 years ago. The typical first-time buyer couple has to find an average of £29,200 up front - equal to 74% of their joint take-home pay.

Affordability is at its worst level since 1992, with home owners paying on average 22% of their pay to service a mortgage, compared with 14.1% in 1996. "Both these factors have pushed first-time buyers against a property brick wall," it said.

It warned that young adults faced a grim future as it upwardly revised its 2006 house price forecast. It believes prices will end the year 7% higher than 2005 and predicts that, although the pace will slow in 2007, they will edge up a further 3%.

The struggle to afford sky-high house prices is pushing many buyers to consider lengthening the term of their mortgage to cut monthly servicing costs. Northern Rock is one of several lenders willing to spread mortgage costs over 35 years rather than the traditional 25 years, while Bradford & Bingley boasts a deal with a 45-year repayment term.

Both were yesterday trumped by Kent Reliance, a small but fast-growing lender based in Chatham. Its loan in effect has no repayment date. Borrowers will be able to take out a 25-year interest-only loan, and after the end of the 25-year period, will simply be able to extend it for a further 25 years. The borrower keeps paying interest but is under no obligation to repay the capital. The loan is "portable" so when someone dies, it can be passed on to the next generation or paid off with the sale proceeds of the dead person's property.

Kent Reliance's chief executive, Mike Lazenby, said the "inter-generational mortgage" was one of many options open to customers with interest-only loans. "We wrote to all our customers who have interest-only mortgages to remind them they have to decide what they want to do. The inter-generational mortgage is one of the options. They can keep it on interest only and when they die they pass on the property and the mortgage to their kids."

The scheme could help cut the amount paid in inheritance tax, which kicks in at £285,000 and is affecting more people because of soaring house prices. A child inheriting a £400,000 home and a £150,000 mortgage would not pay the tax because the value of the estate is only £250,000.

Leading lenders said they would not be rushing to bring out lifetime home loans. Nationwide said: "We don't have any plans to launch a mortgage you will still have on your deathbed. The issue here is responsible lending. We would not want our borrowers to have to pass on their debts to later generations."

RICS said the solution to the affordability crisis was not to extend mortgage loan terms but to increase the housing stock. David Stubbs, an economist with RICS, said Britain needed to build more social housing and "tackle the problem of nimbyism in the countryside".