The Labour-controlled Southwark Council is facing intense scrutiny over its decision not to fine Chancellor Rachel Reeves for renting out her family home for over a year without the legally required selective licence.

While the failure to obtain a selective licence is a criminal offence under the Housing Act 2004, potentially leading to a fine of up to £30,000 or an unlimited fine upon prosecution for ordinary landlords, the council appears to be taking a significantly more lenient stance in Reeves’ case.

The Councillor’s Contradiction

The controversy began when it was revealed that Reeves had let her Southwark home for £3,200 a week without the necessary licence.  Her explanation evolved from an initial admission of omission to a claim that her letting agency had promised to secure the licence but failed to do so after a staff member quit, a version of events for which the agency ultimately apologised.

This resolution stands in stark contrast to previous enforcement actions. Last year, the same council penalised another local landlord and letting agent over £3,000 for the same offence. At the time, a Southwark council spokesperson declared a strong commitment to “holding landlords and letting agents accountable when they fail to meet their legal obligations.”

A New Enforcement Narrative

In response to the Reeves case, the council has issued a different, more accommodating statement, suggesting the Chancellor will escape a fine.

A spokesperson for Southwark Council now states that their policy is to first issue a warning letter to a landlord advising them that they have 21 days to apply for a licence once the council becomes aware of the unlicensed property.

Southwark Council Spokesperson: “Enforcement action such as fines are reserved for those who do not apply within that time or where a property is found to be in an unsafe condition.”

This newly emphasised policy appears to grant Reeves immunity from a financial penalty, as she promptly applied for the licence upon the breach coming to light. Critics, however, are pointing to what they see as a “double standard,” questioning whether a standard landlord who had been operating an unlicensed property for over a year, only applying once caught, would receive the same administrative resolution.

Potential Tenant Action

Despite the council’s decision not to issue a fine, Reeves is not entirely clear of financial risk. The law surrounding unlicensed properties allows tenants to apply for a Rent Repayment Order (RRO), which could compel the landlord to repay up to 12 months’ worth of rent collected during the unlicensed period.

• Potential Repayment: With the property rented at £3,200 per month, an RRO could potentially cost Reeves up to £38,400.
• Legal Responsibility: Crucially, while Reeves has placed the blame on her letting agent, legal experts note that the responsibility for obtaining a licence ultimately rests with the landlord.   The offence is considered strict liability, meaning intent or delegation to an agent does not remove the landlord’s legal liability.

The episode continues to fuel debate over the fairness and consistency of enforcement under the Housing Act, especially for those in senior political positions.