The Prime Minister sought to draw a line under the issue earlier on Thursday (October 30)
The Prime Minister Keir Starmer and his independent adviser on ministerial standards have received “new information” regarding rental arrangements for Rachel Reeves’ South London family home, Downing Street has said. The Chancellor has admitted to not obtaining a required “selective” rental licence for her Southwark home when she moved to No 11 Downing Street after Labour won the 2024 General Election.
The Prime Minister sought to draw a line under the issue earlier on Thursday (October 30). A No 10 spokesman told reporters: “Following a review of emails sent and received by the Chancellor’s husband, new information has come to light. This information has been passed to the Prime Minister and his independent adviser.”
The spokesman declined to give further details but insisted Sir Keir “has full confidence” in Ms Reeves and that she would be delivering the highly-anticipated November 26 Budget. Asked whether the autumn statement would be delivered by the current Chancellor on the expected date, the official confirmed it would.
In a letter to the Prime Minister on Wednesday, the Chancellor admitted she did not obtain a “selective” rental licence required to rent out her London home and apologised for the “inadvertent error”. Ms Reeves added she has now applied for the licence.
The lettings agency involved in Ms Reeves’ rental arrangements said it had apologised to her for an “oversight” that led to a failure to obtain a licence. Gareth Martin, owner of Harvey Wheeler, said: “We alert all our clients to the need for a licence.
“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. Although it is not our responsibility to apply, we did offer to help with this. We deeply regret the issue caused to our clients as they would have been under the impression that a licence had been applied for.”
In his response, Sir Keir said he was happy the “matter can be drawn to a close” after consulting his ethics adviser, who decided against launching a probe. Opposition critics have argued the Government has questions to answer and demanded an investigation.
Southwark Council has suggested enforcement action is reserved for landlords who ignore warning letters about not having a licence or keep a property in an unsafe condition, indicating Rachel Reeves is unlikely to be fined. A spokesperson for the council said: “Southwark Council requires private landlords to acquire a selective licence in order to rent out their homes if they live in specific areas.
“This is in order to protect tenants and ensure landlords are complying with housing requirements, providing safe, well-maintained homes. Selective licences are acquired by sending applications to the council, which we then assess and approve subject to conditions.
“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. We cannot comment on individual cases.”
What is selective licensing?
Local authorities in England and Wales have the power to introduce a licensing scheme covering all privately rented properties in a certain area. It is designed to safeguard tenants against landlords letting out poorly-maintained properties, but it also might be introduced because of concerns about persistent anti-social behaviour problems in rental homes.
If a private landlord wants to rent out a property in that designated area then they have to apply to obtain a licence. Local authorities must contact people in the area to make them aware if there are plans to introduce the scheme, and they should display information about it on their website.
But it is the landlord’s responsibility to apply for a licence if they need one, even if they are advised by a letting agent to manage their property.
Do rules vary in different boroughs and authorities?
Yes, each local authority will have different rules in place and requirements for privately rented homes in the area.e According to analysis by the National Residential Landlords Association (NRLA), there are 47 local authorities that operate selective licensing schemes in England.
The fees for obtaining a licence will also vary, although the national average is around £700 per property and each scheme can last for up to five years, according to research by Direct Line. The London borough where Rachel Reeves was renting out her home, Southwark, has a selective licensing regime in place for designated areas across the borough.
This means it has an enforcement policy for people who need a licence and do not get one.
What happens if you do not get a licence?
If a property does not have the correct licence, then a landlord and letting agent could be charged penalties or face prosecution. This could be an unlimited fine or a financial penalty of up to £30,000 per offence.
Landlords could face a rent repayment order being made against them – meaning they would have to repay rent that was collected during the period that the property was unlicensed, for up to a year.
Does selective licensing improve living standards?
Chris Norris, the NRLA’s chief policy officer, said: “The first priority for any landlord is ensuring the properties they rent are safe and meet all required standards. Whilst selective licensing might play a part in ensuring standards, it should not be seen as a panacea.
“NRLA data shows that there is no clear link between a council having a licencing scheme and improved levels of enforcement against rogue and criminal landlords.”
Timothy Douglas, head of policy and campaigns for industry group Propertymark, said it “does not think that licensing schemes are an effective way of promoting higher quality accommodation in the private rented sector”.
“This is because most schemes fail as they are not adequately resourced to undertake the necessary enforcement activity,” he said. He added that the schemes can often “cost more to run than they raise in fees”.
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