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Tony Pidgley, chief executive of Berkeley Homes, has attacked the banking industry for allowing housebuilders to run up high debt.

Speaking at the Movers and Shakers property networking forum last week, he said that irresponsible lending had contributed towards the current crisis in the housebuilding sector. He singled out HBOS for blame, owing to the string of investments it had made in housebuilders.

He said: 鈥淲hy do banks think they can run housebuilders and why do they debt them up? They should stick to assessing risks. I鈥檇 like to be a hairdresser but people should stick to what they do best.鈥�

He was speaking alongside Gerald Ronson, chief executive of developer Heron, and both predicted that the industry was on a 鈥渓ong and painful road to recovery鈥�.

Ronson said the boom years since the recession in the early nineties had led to 鈥渆veryone participating in an enormous wall of liquidity鈥�. 鈥淚t was greed-driven. Bankers were driven by bonuses and funds were set up that were driven by fees,鈥� he said.

Pidgley said society as a whole was over-leveraged, which had been led by a culture of opportunism. He said: 鈥淚 remember meeting someone in America who borrowed far more money than he should have been allowed to so he could buy a house and sell it for profit. Everybody became a chancer.鈥�

Ronson said the financial system might take a more conservative approach to lending in future. 鈥淲hat you will see is a different type of banking in terms of loan-to-value ratios, but I don鈥檛 think we鈥檒l go back to the dark ages. Remember, though, that it took seven years to sort out the last muddle in the nineties.鈥�

According to Ronson, Gordon Brown is the right person to lead the country out of the financial crisis. 鈥淚f the government hadn鈥檛 done what it did with the banks the situation would be desperate. You can argue that it was too little too late, but Brown has taken the right action.鈥�

Pidgley said that Berkeley Homes鈥� relationship with Saudi investor Saad Group, which has a 29% stake in the business, was as strong as ever, despite the downturn.

He said: 鈥淭hey never interfere and take the view that I鈥檓 captain of the ship. But that鈥檚 built up over a number of years and we鈥檝e made them a lot of money over the years. We鈥檙e holding 拢1bn of their money until the time is right to invest it. They don鈥檛 think short term and won鈥檛 think anything about sitting on their hands for 10 years.鈥�