The Chancellor has so far avoided a probe after breaking the law by renting her family home without a licence while she lives in Number 11.  

Prime Minister Keir Starmer said an investigation was “not necessary” into Rachel Reeves after she apologised for renting her Dulwich home, without obtaining a selective licence from her local council. 

The Chancellor last night referred herself to the independent ethics adviser Sir Laurie Magnus after admitting her error to the Prime Minister following a story by the Daily Mail. 

The incident comes weeks before her second Budget on 26 November. 

Conservative leader Kemi Badenoch called on the Prime Minister to launch a “full investigation”. 

Shadow Chancellor Mel Stride added: “I think he should be concluding her position is untenable.” 

In an exchange of letters with the Prime Minister last night, Reeves apologised and said the “inadvertent” came after renting her home through letting agents. 

She said: “Regrettably, we were not aware that a licence was necessary, and so we did not obtain the licence before letting the property out.” 

Reeves added that she had now applied for a selective licence. 

Starmer replied: “I have this evening consulted with my independent adviser on ministerial standards.  

“He has advised me that in relation to 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 further investigation, is not necessary.” 

The Chancellor put her four-bedroom detached house in Southwark 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 requires landlords to seek a selective licence for homes for rent in Dulwich Wood ward, where Reeves’ home is based. 

Councils can deem that an area needs a selective licence for a variety of reasons, including low housing demand, poor housing conditions, or high levels of crime. 

Southwark Council introduced selective licences across certain areas of the borough two years ago, which last for five years and cost £900. 

Renting a home in such an area is a criminal offence.   

Penalties include a civil fine of up to £30,000, prosecution and an unlimited fine, a rent repayment order and being added to the national rogue landlord database. 

The independent ethics adviser has taken action twice this year against ministers on breaches of the ministerial code that have forced resignations.

In August, homelessness minister Rushanara Ali resigned after evicting tenants and hiking the rent on a property she owns by hundreds of pounds after a few months, which went against the Renters’ Rights Bill Labour passed into law this week. 

A month later, housing minister and deputy Prime Minister Angela Rayner resigned after admitting to underpaying around £40,000 in stamp duty on a £800,000 second home in Hove.