You will have to explain your status to any lender - the fact that you are already responsible for a mortgage (whether you're actually paying it or not is pretty much immaterial) may make lenders unwilling to offer you significant funding. If you don't own the property, you don't own it: it's silly to ask in what situation you'll be better off. In any event, you'll probably be significantly better off if you are treated as a bona fide first time buyer, for the purposes of stamp duty and mortgage interest relief.
Disclose the current mortgage up-front (it'll turn up on a credit check anyway) and explain who is responsible for it. If you can be removed from your sisters' mortgage, it will probably simplify things enormously.