Home owners are much better off than tenants in terms of the proportion of their income spent on housing costs.

A “dramatic fall in interest rates” meant that housing costs for owner occupiers with a mortgage fell 38% between 2007 and 2013, taking the proportion of their income spent on housing costs from 16% down to 10%.

By contrast, the proportion spent on housing costs by tenants rose from 25% to 27% over the same period.

The calculations are in a new report on housing issued by the Institute for Fiscal Studies as a general election briefing.

However, the report also says that rises in house prices relative to incomes have been at least partly responsible for a decline in home ownership and a rise in private renting.

The report says that 27% of the population own their homes outright; 38% own with a mortgage; 17% rent privately and 16% rent socially. A further 1% have another type of tenure.

In a section titled Future Challenges, the report calls for Stamp Duty Land Tax to be abolished, but strangely makes no reference to the Chancellor’s reforms in December.

It says that future governments should raise money through a revalued and reformed council tax system.

The report also says that continued rises in rent would put more pressure on the housing benefit bill, as might the ongoing decline of owner occupation and corresponding increase in the size of the private rented sector.

The report, Housing: Trends in Prices, Costs and Tenure, from the Institute for Fiscal Studies, funded by the Nuffield Foundation, can be found here