Lord Willie Haughey has added to the controversy surrounding the rent freeze by putting a £1 billion affordable homes plan on hold.

The Labour peer identified himself as one of the developers threatening to withdraw from the sector amid speculation that numerous developments could be in jeopardy following the government’s new bill.

Housebuilder Springfield Properties last month put its affordable housing contracts and expansion into the private rented sector on hold ahead of the government revealing details of its plans. Property agent Rettie & Co warned that the plans could lead to the postponement of thousands of new units for rent.

Lord Haughey, who drew up his plans for 11,000 affordable homes after visiting projects in Toronto, Philadelphia and Vienna, said: “I was trying to build communities and I wanted to build 1,200 sq ft homes that people would rent for about £695 per month with maintenance bills included to help people keep their energy costs down.”

However, he told the Go Radio Business Show With Hunter & Haughey that rent freeze and a 28% rise in the cost of bricks had forced him to delay his plans.

Holyrood last week introduced legislation that froze rents and banned evictions for most tenants for at least six months and potentially 18 months. MSPs voted by 89 to 27 in favour of the Cost of Living (Tenant Protection) Scotland Bill after just three days of debate and amendments, but without any warning or consultation with the property sector.

The bill was introduced by Green Party co-leader Patrick Harvie, Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights. It was the first bill to become law under a Green minister anywhere in the UK.

Landords and property developers were outraged by the new legislation, saying they would have to shoulder rising costs and that many would pull out of the sector. There were warnings that this would make matters worse as it would reduce supply force rents up.

Lord Haughey, who unveiled his housing project last year after striking a deal to sell a 24% stake in his family-owned City Facilities Management Holdings business to Scottish property group Ediston for £640 million, responded by saying: “There is no incentive whatsoever to try to make a difference.”

He added: “Patrick Harvie will go down in history as the man who stopped investment and added to the calamitous lack of housing that we have in Scotland, 100 per cent.

“Don’t take my word for it – the house associations are calling for it to be scrapped.”

“I’m calling Patrick Harvie out and asking him to come on the show to debate the rent freeze and debate about heat pumps,” he said.

“None of these are good for Scotland.”