As part of the plan, Scottish property group Ediston has paid £640 million for his 24% stake in City Facilities Management Holdings, which will be retained within City’s portfolio.

The 64-year-old entrepreneur claims to have developed a model which will dramatically reduce rental costs for young tenants and aims to encourage more people to rent than buying a house and paying for a mortgage.

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.”

Lord Haughey 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.

Lord Haughey told The Herald: “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 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.

Ediston has been contacted for comment.