Rachel Reeves 'could be forced to hand back nearly £40,000 to tenants' after renting out her family home with no licence

On Wednesday, Ms Reeves admitted breaking housing regulations by renting out her family home in Dulwich without a rental licence.

As she moved into Number 11 Downing Street, she listed her four-bedroom home in the leafy neighbourhood for £3,200-a-month and has received rent for the property since September 2024.

Southwark Council say private landlords in the area where Ms Reeves's house is situated must obtain a licence in order to rent their properties out.

Now, Ms Reeves faces paying back £38,400 to the tenants who were renting the property.

Tenants can apply for a 12-month repayment order if they have rented a property that is not licensed, under rules imposed by Southwark Council.

At £3,200 per month, it means the total amount the Chancellor may have to pay back totals £38,400.

The scandal has led the Prime Minister to insist that a probe into the matter is not required, with Sir Keir adding that further investigation into the issue was "not necessary".

In a letter to Ms Reeves, the PM said that her apology was a "sufficient resolution".

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In a letter to the Prime Minister on Wednesday night, Reeves admitted she was unaware of the requirement and apologised.

She wrote: "This was an inadvertent mistake. As soon as it was brought to my attention, we took immediate action and have applied for the licence."

Reeves has now applied for a license, after speaking with the Independent Adviser on Ministerial Standards.

Starmer responded: "In light of your prompt action to rectify the position, including your apology- further investigation is not necessary.

"The Ministerial Code makes clear that in certain circumstances, an apology is a sufficient resolution. It is important that all Ministers are able to acknowledge where they consider themselves to have fallen below the standards expected of them.

"I am satisfied that this matter can be drawn to a close following your apology."

He concluded: "It is clear to me that you are treating this matter with the urgency and seriousness it deserves."

Despite Sir Keir determining no probe is needed, Tory leader Kemi Badenoch has called for a "full investigation" after the revelations.

Writing on social media, Tory leader Mrs Badenoch 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."

Deputy Leader of the Liberal Democrats, Daisy Cooper, echoed the calls.

She said: "The Chancellor is meant to be delivering growth but the only thing she appears to be growing is the Government's list of scandals. This latest crisis needs investigating swiftly and thoroughly.

"Just weeks before the Budget, this risks seriously undermining confidence in this government and its ability to focus on the urgent tasks at hand."

The news Ms Reeves failed to obtain the licence comes after Angela Rayner, the former deputy prime minister and housing secretary, resigned following a row about her tax affairs.