Keir Starmer is under fire today for declining to initiate a comprehensive investigation into Rachel Reeves’ failure to secure a rental license for her family home.

The Prime Minister sought to quell a potentially damaging uproar ahead of the upcoming Budget announcement after the Daily Mail uncovered the Chancellor’s actions.

Rachel Reeves did not obtain the necessary rental license when she rented out her family residence in Dulwich, South London, as she took up residence at 11 Downing Street last year.

Despite previous similar incidents leading to court cases and assurances from local Labour officials to hold landlords accountable, Sir Keir has stated the issue is resolved. This conclusion comes after he received both a letter and an apology from Reeves.

The Prime Minister expressed that further inquiry is unwarranted following a consultation with his independent ethics advisor, Sir Laurie Magnus.

“I am satisfied that this matter can be concluded following your apology,” added the Prime Minister.

In a round of broadcast interviews this morning, shadow chancellor Mel Stride warned that Ms Reeves’s position is ‘untenable’. 

Rachel Reeves failed to obtain a rental licence when she placed her family home in Dulwich (pictured) on the rental market last year as she moved with her family into Number 11 Downing Street

The Chancellor put her four bedroom detached house on the market for £3,200 a month last year, and her register of interests states she has received rental income since September 2024

Ms Reeves put her four-bedroom detached house on the market for £3,200 a month last year, and her register of interests states she has received rental income since September 2024.

Southwark Council, the local authority, requires that private landlords in certain areas – including the one where her house is located – obtain a ‘selective’ licence to rent out their property. 

But last night she admitted that she was unaware of the licensing requirement and, following inquiries by the Daily Mail, applied for the licence.

After the story was broken last night on this website, a spokesman for Ms Reeves said: ‘Since becoming Chancellor Rachel Reeves has rented out her family home through a lettings agency.

‘She had not been made aware of the licensing requirement, but as soon as it was brought to her attention she took immediate action and has applied for the licence.

‘This was an inadvertent mistake and in the spirit of transparency she has made the Prime Minister, the Independent Adviser on Ministerial Standards and the Parliamentary Commissioner for Standards aware.’

Shadow chancellor Sir Mel Stride told Sky News Sir Keir was attempting to ‘put this whole thing to bed with a quick exchange of letters’.

‘This was a prime minister who, when he came into office on the steps of Downing Street, talked about restoring the dignity and integrity of government … and if he’s to stand by his word, then I think he should be concluding her position is untenable,’ Sir Mel said.

He added: ‘It seems to me, not at all unreasonable to simply ask that there’s a proper investigation to have a look at all the aspects of this matter.’

Conservative leader Kemi Badenoch said the revelations were ‘very serious’.

‘If the Chancellor, who has spent months floating punishing tax hikes on family homes, has at the same time seemingly been profiting from illegally renting out her house, that would make her position extremely tenuous,’ she said,

‘The Prime Minister must launch a full investigation. He once said ‘lawmakers can’t be lawbreakers’.

‘If, as it appears, the Chancellor has broken the law, then he will have to show he has the backbone to act.’

Touring broadcast studios, policing minister Sarah Jones was asked if Ms Reeves should resign.

‘No, she shouldn’t,’ she told Times Radio.

‘She after the election, of course, moved into 11 Downing Street, as chancellors do. She has a family home in Southwark that she rented out through a letting agency. Now, Southwark Council has what’s called a selective licensing scheme.

‘Some boroughs have them, some don’t … The Chancellor wasn’t aware that she had to apply for this selective licence. As soon as she became aware, she rectified the situation.

‘She applied for that licence, and she told the Prime Minister, and she told the independent adviser on standards.’

It is understood Ms Reeves used an external lettings agency to rent out the house, and she did not receive any advice that a rental licence was required. 

She took immediate action following the Daily Mail’s inquiries, and an application for the licence was submitted yesterday.

Southwark Council, like many other local authorities, requires that private landlords in certain areas obtain a ‘selective’ licence.

This has applied to most private residential properties rented to single families or unrelated tenants in the borough since November 2023.

There are few exemptions to requiring this type of licence – including if the property already has an HMO (house in multiple occupation) licence, is used as a holiday let or for religious purposes, or if the owner also resides in the property as their main home.

It is not thought that any of these apply to Ms Reeves.

Southwark Council said the licences were brought in to ‘improve safety, security and quality for people living in private rented homes’.

They cost £900 and landlords must submit documents proving their property is fit for purpose, including gas, electrical and fire safety certificates, floor plans and tenancy agreements. 

Failing to obtain a licence when required is a criminal offence and can be punishable with an unlimited fine on prosecution, a fine of £30,000 as an alternative to prosecution, or the landlord could be ordered to pay back up to 12 months’ rent.

Experts say the added red tape, alongside other requirements to be brought in under the Renters’ Rights Bill, is forcing some smaller landlords out of the sector.

The inside of the property is pictured. Failing to obtain a licence when required is a criminal offence

Southwark Council policy states that it seeks an ‘informal approach’ if the landlord cooperates and submits a valid application along with the appropriate fee ‘within a reasonable time scale’

Local estate agents said many landlords were not aware they needed a licence, particularly if they had been renting out properties before they became a requirement.

But some raised questions over how Ms Reeves could not have known, given that it appears she began renting out her property after the changes were brought in.

Southwark Council says it ’employs resources to find unlicensed properties and… may apply an enhanced application fee to cover the additional costs incurred in having to find the unlicensed property’.

Landlords have already lashed out at the Chancellor after she raised stamp duty on buy-to-let homes from 3 per cent to 5 per cent in her first Budget.