As I see it their are a few options and it's difficult to assess without more information but I'll try and offer some opinion.

Firstly the housing market is in a bad way and over the next few years it's inevitable that interest rates will rise, making (interest only/tracker) mortages a lot more expensive add to this current house prices are still approxamtley 5 times the average household wage and historically after every crash have dropped to around 3 times average earnings. This still hasnt happened yet and everything indicates that it will do so over the next 5 years. The equity in your current property is only worth 150k when someone pays that for it, 150k is within range of a fair few people though so really depends on demand in your local area and who your bungalow would appeal to ect.

e.g A first time buyer will need to put together around at least 15k in savings to buy this property at terrible interest rates if they have relevant earnings more like 60k to get good rates, this is something that has happened in the last few years, therefore most potential buyers have been caught off guard and not had the chance to start saving early and can't afford deposits. 2nd and 3rd time buyers are likely to be in a similar position to your parents and reliant on they're property selling to be able to make the move and in the current circumstances lots of people are delaying selling in the hope that the market will pick up and they get the prices quoted before the crash.

Because of these factors the rental market is generally very strong and getting stronger, as people are postponing purchases in search of bargains and to save up deposits. As interest rates rise it's likely that rental prices will rise in line, this will bring sale prices down further as it will take people longer to save deposits, their will be less purchasers and defaults will rise with those that are over stretched with big mortgages (basically will be more available houses but less buyers). There are people out their with cash and developers/buy to letters who might snap it up, but again depends on the property/location and the potential to make money from it.

IMO the least risky quick option would be to sell now (if they can) offer to purchase the new place in cash with no chain (which is hugley prefferential) for a lower price and pocket a lump sum of cash which they could later use to help you with a deposit if they wish.

The second option would be to take up a second mortgage, rent your current place out and use the rental money towards the mortgage, long term this is probably the best option (you potentially end up with two houses) but comes with risks, from rates rises, tenants leaving/not paying, and potentially still having to contribute a monthly outgoing for housing. This is even more risky if you plan to sell in the near future as prices could drop drastically and you could end up losing a large stack of the equity currently in your property and their is no guarentee as to how long it will be on the market for.

breaker that was an awesome post I'm currently interested in property and that has given me huge insight I hope my rent doesn't go up I struggle as it is!!

Try a different morgage advisor?

AJay