'Relax' is message to lenders
But, according to building boss Chris Beighton, the housing industry has also reverted back to the early days of the Thatcher era.
"We have gone back to 30 years ago, when you needed a 20 to 30 per cent deposit to buy a house," said Mr Beighton, managing director of Westleigh Developments, of Whetstone. "But people are not used to that situation."
He said banks and building societies should be less cautious as the market continues to pick up.
"You are only borrowing too much money if you are borrowing money you can't afford to pay back," he said. "It's not the percentage of the value, it's the total amount. If someone has the ability to pay a loan, it doesn't matter if it's 70 per cent or 100 per cent.
"What happens in an over-heated market is that people are throwing money at people without caution. Now lenders are making sure you have got value in the property and it more than covers the debt. That 20 to 30 per cent ratio comes on top of houses being under-valued."
His comments come after Loughborough and Hinckley & Rugby building societies last week said they had re-introduced 90 per cent mortgages. But Mr Beighton wants more lenders to follow suit.
"Until we have more available funding in the market, we won't have the opportunity to grow," he said. "We need more funds. The lenders have got to be confident the property values are now stable and we are not going to see more cuts in value. It is this that will benefit first-time buyers."
He felt the Kick-start programme, introduced by the previous Government, would also help first-time buyers.
To help them onto the property ladder, the scheme allows them to defer payment of 30 per cent of the cost of a house.
But the £250 million programme is now being reviewed by the coalition Government.
Mr Beighton said that 30 sales had been as a result of this scheme, while another 500 were depending on it. These were at housing developments in Derbyshire, Corby, Lincoln and Rotherham.
These schemes will be crucial to Westleigh, because, last year, 90 per cent of its £68 million turnover came from so-called social housing – schemes designed to make it easier for those on low income to get on the housing ladder.
The other 10 per cent came from commercial property and private housing development. This made up 35 per cent of turnover two years ago.
Mr Beighton expects the Corby and Lincoln projects to continue.
The company's social housing and commercial property businesses have helped to shield it from the worst of the downturn.
"We have survived it all because of the spread of our business – the fact we do social housing, private housing and commercial," he said.
"We have not got a big land bank we paid too much for and so we didn't have to write down a lot of what we had.
"Given the fall-out in the industry, we have had a relatively comfortable ride."
The company, set up 25 years ago by Mr Beighton and his wife, Judy, has filled its Hamilton Office Village site in Leicester and has sold three units at its LE3 commercial site in Leicester Forest East.
It also has a business park in Towcester, Northamptonshire, and it is about to build new offices for a housing association in Lincoln.
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