Rachel Reeves faces calls to resign over rental rule break: 'Politicians can't be left off easy'

Rachel Reeves is facing pressure to quit as chancellor just weeks before the crunch autumn budget over an error that saw her breach renting rules.

Reeves admitted that she failed to obtain a licence to rent out her family home in Dulwich, south-east London, when she let it out for a reported £3,200 a month, according to the Daily Mail.

The property was in an area covered by selective licensing rules. The 2004 Housing Act powers allow local authorities to force landlords to get a licence to rent a home out in their area.

The timing of the gaffe could not be more awkward for the Labour government. The Renters’ Rights Act came into force after a long wait earlier this week and it’s four weeks until Reeves will preside over an autumn budget where she is expected to announce tax rises.

Reeves has written to the prime minister to apologise for the error, which she has blamed on a failure from the letting agent who manages the property. Prime minister Keir Starmer has accepted her apology and said “the matter can be drawn to a close”.

But that hasn’t stopped opposition leader Kemi Badenoch calling for an investigation while London Renters Union (LRU) has urged the chancellor to quit.

Jae Vail, a spokesperson for the LRU, said: “Rachel Reeves must resign. At a time when infants are dying in temporary accommodation, when hundreds of thousands of private renters are trapped in dangerous homes, it is unacceptable for the chancellor to flout what scant protections tenants have.

“The new regulations in the Renters’ Rights Act will only make tenants safer in our homes if landlords who break the law are meaningfully held to account. Politicians cannot be let off easy.”

Selective licensing has been used as a way of driving up property standards and tackling anti-social behaviour.

Landlords who breach the selective licensing system can see their homes taken off them until they carry out repairs or are forced to repay tenants through rent repayment orders.

Big Issue reported on how Merton Council had used selective licensing last year. The London local authority seized 18 properties of a rogue landlord who failed to carry out repairs despite complaints from tenants.

The local authority gained the power to manage the properties for 12 months with rent payments going towards repairs on the property. The landlord was also blocked from evicting any tenants and remained responsible for paying off mortgages on properties.

Councillor Andrew Judge, Merton Council’s cabinet member for housing and sustainable development, told Big Issue he would like to see the powers used more widely. He said: “He added: “People in very difficult rental circumstances are often vulnerable and councils need to do their best to offer facilities to shield people from aggressive landlords and one way is by the exercise of such powers.”

The government’s English devolution white paper, published last December, said the government would strengthen local authorities’ ability to introduce large selective licensing schemes without requiring approval from housing secretary Steve Reed.

Renters have also been boosted this week through the arrival of the Renters’ Rights Act, which promises to change the power balance between tenants and landlords.

Roz Spencer, head of the renter advocacy service Safer Renting, said: “The chancellor’s failure to obtain a landlord licence highlights exactly why stronger, consistent enforcement across the private rented sector is essential.

“The government’s Renters’ Rights Act ignores expert advice to make landlord licensing a national scheme, instead opting for a weaker registration model whose enforcement is unclear.

“Without robust enforcement, poor practice and illegality will continue unchecked. Property agents also need proper regulation and professional standards, as too many landlords rely on advice that is inadequate – and sometimes unlawful.”

Reeves is the latest government minister to face pressure over her housing situation.

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Homelessness minister Rushanara Ali was forced to quit in August over allegations that she put her home back on the market for higher rent after tenants left. Then housing secretary Angela Rayner also resigned after underpaying stamp duty on a flat in Hove that she bought in May.

The Ali row saw Big Issue ambassador Kwajo Tweneboa argue that government ministers shouldn’t be landlords. Tweneboa said: “When ministers are landlords, every conversation about rent stabilisation, eviction bans, or landlord licensing is clouded by one simple question: whose interests are they really serving?”

Former Labour MP Zarah Sultana launched an early day motion in September calling for the government to launch legislation to prevent MPs from renting out properties.

Meanwhile, the Green Party went a step further and voted to make it party policy to abolish landlords.

Reeves’s gaffe has revitalised calls for MPs to be blocked from becoming landlords.

LRU’s Vail said: “How can the millions of people struggling right now trust the government to tackle rising rents when so many politicians are dodging their responsibilities and cashing in on the housing crisis? It is a conflict of interest. It’s time to get landlords out of parliament for good.”

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