Lord Haughey plans to build 11,000 affordable homes

Lord Haughey wants to make renting more affordable for young people

Business tycoon Lord Willie Haughey plans to spend more than £1bn on building 11,000 homes affordable homes in Scotland over the next nine years.

His Glasgow-based company, City Facilities Management Holdings, has formed a partnership with property group Ediston.

He said the plan would reduce rental costs and make renting preferable to taking out a mortgage.

Ediston, based in Edinburgh, has bought a 24% stake in his company for £640m.

Lord Haughey hopes the housebuilding partnership will help to address the housing shortage in Scotland.

'These houses won't be for sale'

He told BBC Scotland: "I'm just trying to help with the housing crisis.

"I read an article that said young people spent more than 50% of their income on housing. I thought there must be a better way than paying for bricks and mortar. These houses won't be for sale."

The 64-year-old said the new homes would cost about £700 per month for a 1,200 sq ft property.

"Nobody is providing homes at these prices," he said.

The first housing development with Ediston will be in Crown Street in Glasgow's Gorbals.

It will consist of 356 luxury apartments of about 1,200sq feet and include 87 electric charging stations and 20 electric cars which can be hired by the hour.

Take pride in home

Lord Haughey, who originally spoke to The Herald about his plans, said the latest technology would also reduce tenants' energy bills.

"We are trying to build houses that you would be proud to stay in for the rest of your life," he said. "The whole idea is that renting is better than having a mortgage.

"You can save equity in cash over the month rather than having bricks and mortar."

Lord Haughey said the £640m from the deal with Ediston would be retained within City Facilities Management Holdings. He said the money would be used to leverage a further £400m of borrowing to enable it to invest more than £1bn in building 11,000 homes over the next nine years.

The company employs about 14,000 people and is expected to record turnover of more than £1.3bn in its current financial year to December.

Ediston has been contacted for comment by BBC Scotland.

Who is Lord Haughey?

Lord Haughey, who was born in Glasgow's Gorbals area, worked in the refrigeration and air-conditioning industry in Abu Dhabi before returning to Scotland to set up his own business with £70,000 he had saved.

He set up City Refrigeration, which later became City Facilities Management Holdings, with his wife Susan in 1985.

He was awarded an OBE in 2003 and was knighted in the 2012 Birthday Honours for services to business and philanthropy.

On 1 August 2013, it was announced he was going to become a Labour peer in the House of Lords. He was then made a life peer on 18 September 2013.

He is reported to have given more than £5m to charity over a five-year period.

He also provided £2m in funding to the Scottish Cup when the tournament did not have a main sponsor between 2008 and 2010.