A huge home-building project at Colchester Garrison is back on track, despite the slump in the housing market.

Developers were left with empty properties on their books after the credit crunch cooled demand from buyers and made banks reluctant to give them mortgages.

It threatened to leave large swathes of former Colchester Army land derelict now the troops have moved from their ageing accommodation to the new Merville Barracks.

However, the housing market showed modest signs of recovery this year and main developer Taylor Wimpey says it is now back where it wants to be – selling homes it has yet to build.

Sales and marketing director Tina Dedman revealed: “As it stands today, we don’t have any stock.

“We are in a very healthy position. We are selling forward. We are marketing homes which will be ready in three or even six months time.”

Earlier this month, Taylor Wimpey announced a £1.97billion loss for 2008 and revealed it had secured a new debt facility with its bankers.

The company, formed by a merger of George Wimpey and Taylor Woodrow, endured a torrid time as the dramatic collapse in sales forced developers across the country to put projects on hold.

But Ms Dedman said cutting prices and slowing down the rate of building had helped to restore some stability to its operations.

She explained: “About 18 months ago, all developers were developing at a speed which historically suited the market we were in.

“It slowed very quickly, but we have tried to counter that by being realistic with our prices.”

There is still a long way to go on the garrison project. About 750 homes have now been built and occupied, leaving 1,950 still to go up.

Ms Dedman said the dampened economic conditions had made the market more attractive to some potential buyers.

Property might no longer be a good bet for those simply looking for an investment, but with interest rates at a historic low, first-time buyers who manage to get a mortgage are finding the repayments more manageable now than during the boom.

She explained: “First-time buyers recognise it is the bottom of the market and now is the time to buy.

“If anything, it is easier to sell to them now than before.”

The vigorous pace of Colchester’s housing growth has drawn criticism from many quarters, with concerns about the pressure 2,600 new families on the garrison developments will put on local roads and services.

Perhaps an even more worrying prospect is the threat of redundant Army buildings standing unused for years and becoming targets for arsonists and vandals, as did the old Severalls Hospital.

Ms Dedman has a different take on such large-scale developments.

They always court controversy, she says, but seeing the new residents arrive is “the best part of the job”.

“When you start out, you are on your own in a sales office, in a little cabin,” she goes on. “By the end, you have a thriving community.

“At the garrison in particular, there is a great opportunity because you have quite a lot of rather run-down old buildings, but also so much greenery.

“It is very rare to be creating new homes around a space as big as Abbey Field. It’s huge!

“In the summer, all the kids are out there playing football and so on and it makes for a lovely atmosphere.

“We will soon be getting to the point of putting up nursery schools and shops. It’s growing into a proper neighbourhood, not just houses.”