Keir Starmer avoids political damage over chancellor Rachel Reeves’ rental licence row

30 October 2025 , 21:50

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Keir Starmer seems to have avoided significant political harm from potentially losing his chancellor weeks before the budget, following 24 hours of intense scrutiny over whether Rachel Reeves broke the law by renting out her family home.

The Conservatives argued that Reeves should be dismissed if she committed an offence by not obtaining a council licence before renting out her four-bedroom house in south London when the family moved into 11 Downing Street. Initially, No 10 was unable to explain why Starmer believed an apology from the chancellor sufficed.

However, after a chaotic day, the letting agency used by Reeves took the blame for not applying for the licence and apologized for the mistake.

Emails later released by Downing Street between the agency and Reeves’s husband, Nicholas Joicey, a senior civil servant, confirmed this account.

Kemi Badenoch, the Conservative leader, argued that this did not resolve the matter and called for Starmer to conduct a full investigation. But with Southwark council stating it had no plans to take action against Reeves, her position appeared secure.

The departure of Reeves would have been a devastating setback for Starmer. The chancellor is preparing a budget to be announced on 26 November, considered crucial to the government’s prospects.

It would also have been the second loss of a key minister in recent months, after Angela Rayner stepped down as deputy prime minister and housing secretary in September over another property-related controversy, in her case the underpayment of stamp duty on an £800,000 seaside flat.

The row over Reeves’s property issues began on Wednesday evening with the publication of letters between her and Starmer regarding her failure to pay for a £945 “selective licence” before renting out the home, as required in some parts of Southwark.

In her letter, Reeves stated she was unaware of the need for a licence and applied as soon as she became aware.

In his response, Starmer said after consulting his independent adviser on ministerial standards, Laurie Magnus, he was satisfied the breach was “inadvertent,” and that given her prompt action once she knew about the licence, an apology was sufficient.

Downing Street refused to say whether Magnus had seen any evidence supporting Reeves’s claim of making an inadvertent mistake or whether he had accepted her word.

No 10 declined to say whether Reeves violated the ministerial code or had potentially broken the law. Badenoch argued that if Reeves were fined, she should be dismissed, citing Starmer’s argument after Boris Johnson’s fine for breaching Covid rules that “lawbreakers cannot be lawmakers.”

In early good news for Reeves, Southwark released a statement saying that while it could not comment on individual cases, it pursued enforcement actions such as fines only when someone did not apply for a licence within 21 days of being warned they needed one, or if a property was found to be in an unsafe condition.

No 10 later announced that Magnus had reopened his examination of the case after new information emerged in emails to and from Joicey.

Shortly afterwards, Harvey & Wheeler, an estate and lettings agency in Dulwich, south London, claimed responsibility for the lack of a licence. While property owners typically apply for these, they said a now-departed staff member offered to do so on Reeves’s behalf and then did not.

In a statement, the company explained that “in an effort to be helpful,” the then-property manager offered to apply for a licence on behalf of Reeves’s family but did not and subsequently left the company just before the tenancy began.

“Unfortunately, the lack of application was not caught 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,” it said. “We deeply regret the issue caused to our clients as they would have been under the impression that a licence had been applied for.”

The emails released later by Downing Street between the agency and Joicey confirmed this story.

A message from the agent to Joicey read: “I will do the selective licence once the new tenant moves in as I won’t need to do this just yet. At the moment we are only applying for a council licence.”

In response, Joicey asked the agency to “please, do go ahead” and obtain the licence, along with an electrical safety test, asking if any more administrative tasks needed completion.

In a new letter to Starmer, Reeves wrote that the agency had accepted responsibility, adding: “Nevertheless, as I said yesterday, I accept it was our responsibility to secure the licence. I also take responsibility for not finding this information yesterday and bringing it to your attention.

“As I said to you today, I am sorry about this matter and accept full responsibility for it.”

A Tory party spokesperson said: “Last night Rachel Reeves said ‘she had not been made aware of the licensing requirement.’ Today, we find out that Reeves was alerted to the need for a licence in writing by the estate agents.

“Having been caught out, the chancellor is now trying to make the estate agents take the blame … With more information coming to light every few hours, the prime minister needs to grow a backbone and start a proper investigation.”