Reeves rebuked by PM over 'regrettable' rental confusion but faces no further action

The prime minister has said Chancellor Rachel Reeves will face no further action over the failure to obtain the correct licence when renting out her family home.

However, Sir Keir Starmer said it was "regrettable" Reeves did not share all the relevant emails when she first told him about the issue on Wednesday evening.

The chancellor initially said she was not aware a licence was needed but later found correspondence between her husband and the letting agent showing he was told one was needed but the agency would apply on their behalf.

The letting agent has said an "oversight" meant it had never ultimately applied for the licence.

Reeves has apologised for the "inadvertent mistake" but said she accepted full responsibility.

Conservative Party chairman Kevin Hollinrake called for a full investigation, saying the chancellor's story "keeps on changing".

"On Wednesday, the independent advisor on ministerial standards said he was simply willing to take Rachel Reeves' word and the case was closed," he told BBC Breakfast.

"The next day some more evidence came to light, which meant Rachel Reeves's story on Wednesday was a false narrative of the event."

Reeves put her four-bedroom south London home up for rent in July 2024, when Labour won the general election and she moved into 11 Downing Street.

The house falls in area where Southwark Council requires private landlords to obtain a selective licence at a cost of £945. Reeves or her letting agent could face an unlimited fine if the council takes the matter to court.

The chancellor said she first became aware that her property did not have the correct licence on Wednesday when the Daily Mail, who first reported the story, contacted her.

After reviewing the emails between the estate agent and Reeves's husband, the prime minister's ethics adviser Sir Laurie Magnus said on Thursday night that he "remains of the view that this was an unfortunate but inadvertent error".

While he did not rule on whether the ministerial code had been broken, Sir Laurie said he found "no evidence of bad faith".

In a letter to Reeves on Thursday evening, Sir Keir said he agreed with his ethics adviser and saw "no need for any further action".

He accepted the emails from the estate agent were only found by her husband on Thursday morning and Reeves was "acting in good faith".

However, he added: "It would clearly have been better if you and your husband had conducted a full trawl through all email correspondence with the estate agency before writing to me yesterday."

In a statement, Gareth Martin, owner of Harvey & Wheeler, the estate agent which rented out the property on behalf of Reeves, said: "In an effort to be helpful our previous property manager offered to apply for a licence on these clients' behalf, as shown in the correspondence. That property manager suddenly resigned on the Friday before the tenancy began on the following Monday.

"Unfortunately, the lack of application was not picked up by us as we do not normally apply for licences on behalf of our clients; the onus is on them to apply. We have apologised to the owners for this oversight.

"At the time the tenancy began, all the relevant certificates were in place and if the licence had been applied for, we have no doubt it would have been granted.

"Our clients would have been under the impression that a licence had been applied for."