Chancellor Rachel Reeves has been cleared of wrongdoing after an inadvertent failure to obtain a required rental licence for her south London home, drawing a line under a controversy that has dogged the government in the run-up to her crucial budget announcement. Despite calls from opposition leaders for her resignation, Prime Minister Sir Keir Starmer and his independent ethics adviser concluded there was no evidence of bad faith, and Number 10 has signaled it considers the matter closed.
The issue first came to light following a report in the Daily Mail that Reeves, who moved into Number 11 Downing Street last year, had failed to secure a “selective” licence for her Dulwich home, which she continued to rent out. Under the Housing Act 2004, Southwark Council requires landlords in certain areas to obtain such licences to ensure housing standards are met and tenants are protected. The omission, described by Reeves as an “inadvertent mistake,” sparked a political firestorm, with Conservative leader Kemi Badenoch demanding her resignation and accusing the government of hypocrisy.
According to Sky News, the Chancellor initially wrote to the Prime Minister on October 29, 2025, explaining she was “not aware that a licence was necessary” and had not obtained one when she let out her family home. However, further correspondence soon emerged: Reeves’ husband had communicated with their estate agents, Harvey & Wheeler, who assured him they would apply for the licence on his behalf. The agency later admitted that, due to a staff member’s sudden resignation, the application was never completed.
In a letter to Starmer, Reeves expressed regret for the delay in clarifying the situation and accepted full responsibility. “I am sorry about this matter and accept full responsibility for it,” she wrote to the Prime Minister, as reported by Sky News. Number 10 published the relevant emails, which appeared to corroborate Reeves’ account. Gareth Martin, owner of Harvey & Wheeler, issued a public apology, stating, “We deeply regret the issue caused to our clients as they would have been under the impression that a licence had been applied for.”
Prime Minister Starmer, after reviewing the correspondence and advice from his independent ethics adviser Sir Laurie Magnus, described the incident as “an inadvertent failure.” He added, “I see no need for further action.” Sir Laurie Magnus found “no evidence of bad faith” in Reeves’ conduct, echoing the sentiment that the error was not deliberate.
However, not everyone is satisfied with the outcome. As The Pavlovic Today notes, the affair has left lingering questions about ministerial accountability. Conservative critics argue the Chancellor’s position is “untenable,” pointing to what they see as a double standard between ministers and ordinary landlords. Compliance expert Phil Turtle, quoted in Property 118, warned that “failure to licence is a strict liability crime under section 95 of the Housing Act 2004, with unlimited fines if prosecuted in court.” He further explained, “Just like speeding, it is a strict liability crime and there is no defence of ‘I didn’t know’, or ‘my letting agent didn’t tell me.’ Councils can be absolutely merciless in prosecuting small landlords because the resulting penalties have become a major revenue stream.”
Indeed, local authorities such as Southwark Council have confirmed that landlords are required to acquire selective licences in designated areas to protect tenants and maintain housing standards. The council stated, “When we become aware of an unlicensed property, we issue a warning letter advising the landlord that they have 21 days to apply for a licence – enforcement action such as fines are reserved for those who do not apply within that time or where a property is found to be in an unsafe condition.”
The potential consequences for landlords who fail to comply are significant. Turtle highlighted that “councils treat this as one of the most heinous crimes possible and we see dozens of small landlords every week fined often between £12,000 to £20,000 for this exact same criminal offence.” He also pointed out that tenants may be able to reclaim up to 24 months of rent if a landlord is found to be in breach of licensing requirements, a possibility that could cost Reeves at least £38,000, according to some media reports.
Despite these warnings, the Prime Minister has consistently backed his Chancellor. Starmer sought to put the matter to rest by emphasizing Reeves’ prompt apology and the lack of bad faith, while also touting the government’s achievements on renters’ rights. In a post on X (formerly Twitter) on October 31, 2025, Starmer listed recent government accomplishments, including “strengthening renters’ rights through Awaab’s Law,” even as the rental row involving Reeves continued to make headlines. His message, “Action not words,” underscored Labour’s commitment to housing reform, though some critics found the timing awkward, given the controversy swirling around the Chancellor.
For her part, Reeves has moved quickly to apply for the correct licence and has expressed contrition for the oversight. The letting agency, Harvey & Wheeler, has also accepted responsibility, citing the sudden departure of the staff member who was supposed to handle the application. The agency’s apology, coupled with the release of email evidence, appears to have satisfied Downing Street, at least for now.
Still, the episode has exposed the complexities and pitfalls of the UK’s local licensing regime. As Turtle explained, “Selective licensing is a discretionary tool that can be used by councils if an area meets one or more of a set of conditions. A landlord operating perfectly legally one day can find themselves in breach of the requirement to licence the next, simply by being unaware that the requirement to have a licence has been introduced.” He added, “Local authorities do have an obligation to publicise their intention, but these consultations are often poorly advertised and there’s no legal obligation to directly inform landlords. In other words, they do the minimum required.”
With Reeves now preparing to deliver her first major budget on November 26, 2025, the government is eager to move past the row. But the affair has left an indelible mark, raising uncomfortable questions about fairness and accountability in the enforcement of housing laws. For landlords across the UK, the message is clear: ignorance is no defence, and even the highest officeholders are not immune from the pitfalls of property regulation.
The government hopes the Chancellor’s apology and remedial actions will be enough to quell the storm, but with political opponents and compliance experts still raising concerns, the debate over ministerial accountability and renters’ rights is far from over.
