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Rachel Reeves has admitted to “inadvertently” breaking housing rules by renting out her south London home without the specific £945 licence required by the local council.
The chancellor admitted the error to the prime minister, Keir Starmer, and to parliamentary ethics officers, after it was first disclosed by the Daily Mail.
Reeves put her family home in Southwark up for rent after moving into No 11 Downing Street last year following Labour’s election victory.
A spokesperson said the chancellor had used a letting agency to manage the process, and that while she should have been aware of the obligation to buy the licence, she had not been advised that she needed one.
“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,” Reeves’s spokesperson said.
The Conservative leader, Kemi Badenoch, demanded further action be taken and called on the PM to launch a “full investigation”.
Writing on X late on Wednesday, she cited Starmer saying “lawbreakers can’t be lawmakers” and added: “If, as it appears, the chancellor has broken the law, then he will have to show that he has the backbone to act.”
The regulations of Southwark council stipulate that private landlords in certain designated areas of the south London borough need to obtain a “selective licence” before they can rent out their property.
The chancellor’s spokesperson said she had not been informed by her lettings agency that her home was in such an area.
The spokesperson said Reeves had informed the PM as soon as she was made aware of the requirement.
“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.”
Responding on Wednesday night, Starmer said he had met with Reeves and further investigation into the matter was “not necessary”.
In a letter to the chancellor, he said: “I have this evening consulted with my independent adviser on ministerial standards.
“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.”
“I am satisfied that this matter can be drawn to a close following your apology.”
The four-bedroom detached house had been advertised for rent at £3,200 a month last year, the Daily Mail and the BBC reported, and Reeves has noted rental income on her record of parliamentary interests since September 2024.
The error will be an unwelcome political hindrance to the chancellor as she prepares to deliver the budget next month – with reports suggesting her policies could include increasing some property taxes.
In her first budget last year, Reeves had raised stamp duty on buy-to-let homes from 3% to 5% for second homes and investment properties, a policy designed to help first-time homebuyers.
The Liberal Democrats’ deputy leader, Daisy Cooper, said: “Just weeks before the budget, this risks seriously undermining confidence in this government and its ability to focus on the urgent tasks at hand.”
