Chancellor Rachel Reeves was on Thursday given some respite in a furore over her unlawful renting out of her family home without a licence, when her letting agent admitted it was partially to blame for the mistake.
Reeves was theoretically liable to repay more than £38,000 in rent after admitting breaching housing rules and she faced calls from the Conservatives to resign, with less than a month until her crucial Budget.
But on Thursday the lettings agency used by Reeves and her husband apologised for an “oversight”, saying it had offered to apply for a licence on her behalf but had not.
Gareth Martin, owner of Harvey & Wheeler, said its normal process is to alert clients who are in need of a licence, in a statement seen by PA Media.
He added that in an effort to be helpful, the company’s previous property manager offered to apply for a licence for the Reeves family but suddenly resigning three days before the tenancy began.
He said: “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.”
Southwark council, which runs the London borough where Reeves rented out the home, says tenants have the right to apply for a refund of their rent during the period in which the property was let out without a licence.
Reeves rented out her family home for £3,200 a month after entering Downing Street last year, and the council states on its website that repayment orders can cover “up to 12 months’ rent”, indicating that she could be liable for as much as £38,400.
In a letter to Sir Keir Starmer published on Thursday and seen by PA, Reeves confirmed that the letting agency had not taken forward a licence application “in part due to a member of staff leaving” but that she accepted “full responsibility” for the issue.
“As I said to you today, I am sorry about this matter and accept full responsibility for it,” she wrote. A spokesperson for Starmer said “the prime minister still has confidence in Reeves”.
Reeves and her husband used the lettings agency to rent out the family home in Dulwich after they moved into a flat in Downing Street following Labour’s general election victory last year, according to people familiar with the matter.
Southwark council, like many local authorities, requires private landlords to obtain a “selective” licence to rent out property in certain areas.
Sarah Jones, the UK’s policing minister, told Times Radio that Reeves would not be sacked.
The potential penalties the chancellor faces are of a similar magnitude to the £40,000 Angela Rayner, the former deputy prime minister, failed to pay in stamp duty, which led to her resignation in September.
In additional to its policy on repayment orders, Southwark Council has also fined people for renting out properties without a licence. In one instance last year, it imposed penalties of more than £3,000, split between the property owner and letting agent.
The council said on Thursday that enforcement action such as fines “are reserved for those” who do not apply for a licence after receiving a warning notice from the council. They said they could not comment on individual cases.
Starmer said in a letter on Wednesday night that while it was “regrettable” that Reeves had not sought the correct licence, he had concluded that an apology was sufficient after consulting with Sir Laurie Magnus, his ethics adviser.
Starmer rejected the need for a formal investigation into a potential breach of the ministerial code, despite Conservative party leader Kemi Badenoch suggesting Reeves may have to leave her position.
Labour MPs privately expressed dismay at Reeves’ error, drawing parallels with Rayner. But a Downing Street spokesperson said earlier on Thursday that they were “distinct and separate cases”.
The spokesperson added: “Reeves has explained that it was an inadvertent mistake, and as soon as it was brought to her attention, she took immediate action and applied for the licence.
“The chancellor has rightly acted with urgency on this matter, and the ministerial code makes clear that in certain circumstances, and in consultation with the independent adviser, an apology is sufficient resolution.”
Reeves has admitted a series of errors in recent years. In 2023 she was accused over apparent plagiarism in a book she authored, including entire sentences and paragraphs lifted from other sources without acknowledgment.
In 2025, Reeves’ spokesperson blamed an “administrative error” for a LinkedIn profile that exaggerated the length of time she had worked at the Bank of England and her position in a subsequent role at HBOS.
In March she said she would not take free concert tickets again after a backlash against accepting tickets worth £600 for a Sabrina Carpenter gig for her and her family.
“I do understand perceptions,” Reeves said, after initially defending the free tickets as a way of doing “normal everyday things”.
Reeves has previously been a supporter of selective licensing by councils, praising Leeds city council’s decision to expand its selective landlord licensing policy to the Armley area of her constituency.
On Wednesday, Reeves informed Starmer, as well as Magnus and the parliamentary commissioner for standards, of her “inadvertent mistake”, according to her spokesperson.
The Daily Mail, which first reported the story, said Reeves had put the four-bedroom detached family home on the market at a monthly rent of £3,200 last year.
Additional reporting by Mari Novik