Billions of pounds a year have been spirited away from the housing market by the Treasury a leading charity has claimed.

The government has benefited from billions of pounds a year in additional revenue following the abolition of mortgage tax relief and other policy changes relating to housing. But the extra money – although badly needed for housing purposes – has been spent elsewhere, according to a Joseph Rowntree Foundation report.

Policy shifts the Treasury has benefited from since the mid-1980s include:

• The abolition of mortgage interest tax relief (MITR) – the cornerstone proposals from The Duke of Edinburgh's Inquiry – which has boosted tax receipts by £30 billion, plus a further £3 billion each year
• Receipts from the Right-to-Buy sales of council housing that have yielded around £45 billion – only a quarter has been recycled into improving public housing
• Stamp Duty on property sales (plus a strong housing element to Inheritance Tax), which last year brought in £6.5 billion
• More than £50 billion borrowed by housing associations from the private sector, which has dramatically reduced levels of public expenditure on loans for subsidised, social housing

Minister for Housing and Planning Yvette Cooper is today expected to reject the accusations when she speaks at a conference in London.

Today’s report, written by the Foundation's director, Lord Richard Best, argues the case for committing more of the Treasury's gains to tackle some of the increasingly acute housing problems now facing the country.

"The contrast between large financial gains to the Treasury from changes in housing policy and the continuing importance of meeting housing needs is very striking," said Lord Best. "If only a modest proportion of the Government's increased revenue were to be recycled to boost the supply of affordable homes for rent and low-cost ownership, and improve the safety net for low-income home-owners, it could make a vital contribution to defusing the growing crisis in British housing."

Besides helping to increase the supply of affordable housing, the report argues that Treasury funding is needed to improve the 'safety net' for low-income home-owners who would risk major mortgage arrears problems in an economic downturn.

Projections in another JRF report being released today suggest that a recession comparable to that in the early 1990s would lead to mortgage arrears at a fifth higher than they were in 1992.