Rachel Reeves’ tenants could be in line for tens of thousands of pounds rent refund after the chancellor failed to secure the correct licence to rent out her family home.
Ms Reeves apologised and applied for the correct paperwork after it emerged on Wednesday that she had broken local council housing rules when she rented out the property in Dulwich, south London, after moving into 11 Downing Street.
Under Southwark Council rules, the chancellor should have applied for a “selective” licence when she put her house up for rent. She has said her failure to do so was an “inadvertent mistake”.
According to the council, tenants of an “unlicensed property” may be able to apply for a rent repayment order and get money back from the landlord if the property has been lived in in the last 12 months.
According to information on the council website, the order allows tenants “to recover up to 12 months of your rent back from your landlord”.
The property was listed for £3,200 a month, according to the Daily Mail which first reported the story, meaning her tenants could seek around £40,000 if the requirements are met.
Southwark Council also details that people can be “prosecuted or fined if you’re a landlord or managing agent for a property that needs a licence and do not get one”.
The Independent has contacted Ms Reeves and Southwark Council for comment.
Days before the revelations over the licence, Ms Reeves publicly backed plans for a licensing scheme for rental properties in Leeds, saying it would improve conditions for renters.
Conservative chair Kevin Hollinrake reshared a tweet from the chancellor from earlier this month in which she supported the changes in the Armley part of the city.
“While many private landlords operate in the right way, we know that lots of private tenants in Armley face problems with poorly maintained housing,” she posted.
The chancellor is understood to accept she should have obtained the licence, but relied on the advice of a letting agent and was not told it was necessary.
It comes after No 10 repeatedly refused to say whether the chancellor broke the ministerial code when she failed to get the licence.
Sir Keir Starmer is seeking to draw a line under the row after consulting his ethics adviser Sir Laurie Magnus, who decided against launching a probe. A number of high-profile government figures, including former deputy prime minister Angela Rayner, have had to step down as a result of scandals.
A Downing Street spokesperson repeatedly declined to say whether the standards rules had been breached, or if the prime minister or Sir Laurie had seen evidence of Ms Reeves’ version of events.
Faced with questions over the rule-break, the No 10 spokesperson repeatedly pointed to the ministerial code, which points out that an apology is “sufficient resolution” in some cases.
In a letter to the prime minister published on Wednesday evening, Ms Reeves said: “I sincerely apologise for this error and I would be happy to answer any questions you may have.”
She told him it “was an inadvertent mistake. As soon as it was brought to my attention, we took immediate action and have applied for the licence.”
In his reply, Sir Keir said he had consulted his independent adviser, adding: “He has advised me that in relation to your inadvertent failure to secure the appropriate licence for your rental property – and in light of your prompt action to rectify the position, including your apology – further investigation is not necessary.”
“An apology is a sufficient resolution” in such cases, he added.
A spokesperson for Ms Reeves said: “Since becoming chancellor, Rachel Reeves has rented out her family home through a lettings agency.
“She had not been made aware of the licensing requirement, but as soon as it was brought to her attention, she took immediate action and has applied for the licence.
“This was an inadvertent mistake and in the spirit of transparency, she has made the prime minister, the independent adviser on ministerial standards and the parliamentary commissioner for standards aware.”
The revelations come just weeks before the chancellor’s long-awaited Budget, where she faces the prospect of tax rises to balance the books.
When it was put to No 10 on Thursday that the process was resolved quickly to avoid upsetting the markets, the spokesperson said: “I don’t accept the framing of that at all.”
Kemi Badenoch, meanwhile, said that the chancellor needs to “be on top of her paperwork” over the matter.
The Tory leader said: “She is the chancellor. She needs to be on top of her paperwork. She was aware of this legislation. I think there should be an investigation.
“But the bottom line is that Keir Starmer said again and again, ‘the law breakers shouldn’t be lawmakers’, so if she’s broken the law, then he should apply his own rules to her.”
