LORD Willie Haughey has revealed plans to spend more than £1 billion on building 11,000 homes in Scotland over the next nine years, aiming to tackle shortages and transform the housing market.

He is embarking on this huge project after striking a deal to sell a 24 per cent stake in his family-owned City Facilities Management Holdings business to Scottish property group Ediston for £640 million.

The Glasgow-based entrepreneur has developed a model which he believes will dramatically reduce rental costs for tenants, and aims to make this preferable to buying a house and taking out a mortgage for many people.

Lord Haughey, 64, highlighted his hopes that the housebuilding partnership City is forming with Edinburgh-based Ediston will “go a long way to addressing the housing shortage in Scotland”.

Declaring the “housing problem seems to be getting worse every year”, he said: “We believe it is not sustainable that young hard-working families are paying more than 50% of their monthly income on a mortgage or rent for their home.

“We hope our provision of larger, better-quality accommodation at lower-than-market rents will help rebalance the provision of new housing stock.”

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Highlighting plans to “transform” how houses are built, maintained and managed, Lord Haughey told The Herald: “Hopefully, I have built a model where they will be paying 25% [of monthly income].”

He said that someone in a “nice apartment” in Glasgow might currently be paying £1,800 a month.

Lord Haughey, executive chairman of City, added: “We are talking about £700 a month.”

He said the first housing development with Ediston would be at Crown Street in the Gorbals.

He emphasised that the £640m from the deal with Ediston would be retained within City. Prior to the Ediston deal, City washas been wholly owned by Lord Haughey and his wife Lady Susan Haughey, and Geneva-based son Kenny. Lord Haughey told The Herald: “My dream is that this business will be here in 100 years – that is more important to me than being known as just another rich guy – .“Aat the same time, producing wonderful affordable homes for people.

“This is subsidising the building of new homes.”

He added: “I have been heavily involved in the last two years with the housing crisis, and I wanted to start building houses and make them really affordable. I wanted to make them [so] that people were better off renting them than actually buying them and having a mortgage.”

Lord Haughey revealed he had received an offer to acquire City last year from a suitor in Europe.

However, after discussing his planned housing venture with Ediston Group’s chief executive, Danny O’Neill, the Edinburgh business made the offer to acquire 24% of City.

Lord Haughey’s business employs around 14,000 people and he expects it to record turnover of more than £1.3bn in its current financial year to December.

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City, which is one of the largest privately owned facilities management businesses in the world and is based in the Gorbals

on the south side of Glasgow, will continue to be run by Lord Haughey. The entrepreneur, who

founded the City business in 1985 with Lady Haughey, said: “The entire investment will stay in the company and will be used to leverage a further £400m of borrowings that will allow us to invest over £1bn building 11,000 homes over the next nine years.

“This will represent a new chapter in City and Ediston’s growth.”

Lord Haughey revealed the housebuilding programme would be “starting in the west of Scotland”, with the first development at Crown Street in the Gorbals.

The tycoon said the development would comprise 356 luxury apartments of around 1,200sq feet and include 87 electric charging stations and 20 electric cars which can be hired by the hour.

Lord Haughey said: “We will also use the latest technology to reduce the tenants’ energy bills.

“All of our homes will be for rent and we will create a buying group that will deliver economies of scale that again will reduce costs for our tenants.

“We are delighted to have Ediston as a partner. They have a track record of delivering some of Scotland’s finest developments.

“As we enter a new chapter in City’s growth, we felt it would make

sense to engage with someone who has a proven track record of delivering major development projects.”

He added: “We plan to set up a housebuilding division within City that will deliver larger, greener and affordable houses across Scotland.”

Danny O’Neill, chief executive of Ediston Group, said: “We believe that City’s unique, cutting-edge technology will be a game-changer in the construction of, and the management and maintenance of, houses.

“The platform they have developed, used by some of the world’s largest retailers, is truly best-in-class and, working together, we have demonstrated that this system can be adapted for the housebuilding sector.

“We have ambitious targets and are excited about delivering thousands of new homes at affordable rents.

“Our goal is to deliver completely carbon-neutral homes by 2024.”

Ediston has a UK-wide portfolio approaching £1bn.