With less than a month until the Budget, chancellor Rachel Reeves forced to apologise after she did not apply for a compulsory licence required by Southwark Council when she rented out her family home.
After moving into 11 Downing Street, Reeves put her family home in Dulwich, South London, on the rental market but failed to comply with rules enforced by the local authority, Southwark Council, requiring landlords to apply for a selective licence.
Reeves indicated that her letting agent said they would advise her of any requirements. However, she did not complete the correct paperwork and failed to apply for a 'selective licence', which is mandatory for landlords renting property in the London borough of Southwark.
The issue blew up on Wednesday and within hours Reeves was forced to apologise, sending a letter to the prime minister and meeting him to discuss the breach.
Reeves told Keir Starmer she had made 'an inadvertent mistake' by ignoring the mandatory requirement for landlords to apply for a selective licence.
In a letter to the PM, Reeves stated: 'We were not aware that a licence was necessary, and so we did not obtain the licence before letting the property out. This was an inadvertent mistake. As soon as it was brought to my attention, we took immediate action and have applied for the licence.'
From Starmer's reply, it was clear that the two had discussed the issue in person as he thanked the chancellor for 'meeting with me this evening', adding that he had consulted with his ethics adviser about 'your inadvertent failure to secure the appropriate licence for your rental property - and in light of your prompt action to rectify the position, including your apology - further investigation is not necessary'.
The estate agent that Reeves used to rent out her property has apologised, stating that: '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.'
According to Southwark Council's website, landlords or agents who do not have these £900 licences can be prosecuted, or fined up to £30,000. The council also operates a 'rogue landlord checker', detailing the names of landlords who have received convictions or civil penalty notices.
Selective licenses are designed to crack down on issues for tenants in rented properties including poor housing conditions. They have been brought in across the UK, including in the Reeve's own constituency of Leeds West and Pudsey. In fact, when she was shadow chancellor in 2023, Reeves pushed to have the selective licensing in place.
The Conservatives called for a full investigation and said Reeves should resign if she broke the law, with opposition leader Kemi Badenoch saying 'Starmer will have to show he has a backbone'.
The Budget is scheduled for 26 November.
Peter Nichols – Tax Director BFN Accounts & Tax Limited
www.bfnaccounts.com