Rachel Reeves was warned by a second firm of estate agents that she needed a licence to let out her family home, The Mail on Sunday has been told.
The Chancellor has been engulfed by scandal since the Daily Mail last week revealed that she had been illegally renting out her south London property for £3,200 a month without the proper licence.
After initially telling Sir Keir Starmer she had been unaware of the rules, she was humiliated when emails between her husband and their lettings agency, Harvey & Wheeler, revealed extensive conversations about the need to secure the paperwork.
Now a source has told this newspaper that before engaging that company, Ms Reeves and her husband had approached blue-chip estate agency Knight Frank about managing the property – and were warned about the need for the licence.
The revelation raises fresh questions about the Chancellor’s initial insistence to the Prime Minister that she was not aware of the legal requirements, given that two separate estate agents raised the issue.
On Saturday night a Knight Frank spokesman said: ‘It is standard procedure to notify all clients of their legal and regulatory obligations when letting a property.’
Sir Keir has already rebuked his Chancellor for not checking the email chain with Harvey & Wheeler before making her original protestations of innocence – but insisted there is ‘no need’ for further censure.
But given today’s revelations, the Tories have called for fresh action.
Rachel Reeves was warned by a second firm of estate agents that she needed a licence to let out her family home, The Mail on Sunday has been told. Pictured: The Chancellor with her husband, Nicholas Jocey
Under pressure: Sir Keir Starmer had rebuked Ms Reeves for not checking her emails before protesting her innocence – but previously insisted there is ‘no need’ for further action
Ms Reeves finally applied for a licence on Friday, but still faces the threat of having to hand back a year’s worth of rent – around £38,000 – to her tenants for illegally renting out her south Dulwich property
Shadow Treasury Minister, Gareth Davies said: ‘Each day brings fresh questions about Rachel Reeves’ account. This latest revelation casts serious doubt on her claim not to have known about the need for a licence. Her story seems to shift with every explanation.
‘The Prime Minister must now get to the bottom of this and order a full investigation without delay.’
It is not clear why Knight Frank did not end up managing the property on behalf of Ms Reeves and her husband Nicholas Joicey after she moved to Downing Street.
When asked if it was because of the lack of a licence, the spokesman said: ‘That was not the reason.’
The Mail first made the bombshell revelations about the Chancellor’s lack of a licence on Wednesday evening.
After Ms Reeves claimed that she and her husband were unaware of the requirement, the Prime Minister consulted Sir Laurie Magnus, his independent adviser on Ministerial standards, who told him that further investigation was not necessary.
The emails then revealed that the couple had indeed been aware that they needed to get a licence from Southwark council to let their home in Dulwich.
The Prime Minister is desperate to exonerate Ms Reeves in order to avert the political catastrophe of losing his Chancellor less than a month before she delivers the Budget
Harvey & Wheeler said it took responsibility for the ‘oversight’ because the staff member responsible for applying for the licence on her behalf had suddenly resigned before the tenancy began.
Sir Laurie then told the PM Ms Reeves had committed an ‘unfortunate but inadvertent error’ but did not need to resign, allowing Sir Keir to clear her for a second time.
The Prime Minister wrote to her: ‘It would clearly have been better if you and your husband had conducted a full trawl through all email correspondence with the estate agency before writing to me yesterday.’
Despite this, he concluded that she had acted in ‘good faith’ and said: ‘I still regard this as a case of an inadvertent failure to secure the appropriate licence, which you have apologised for and are now rectifying’.
Ms Reeves conceded it was her responsibility to secure the so-called Selective Licence, and admitted they had found emails in which Harvey & Wheeler told them about the requirements.
The firm said they would apply for a licence on their behalf, but Ms Reeves added: ‘They have also confirmed today they did not take the application forward, in part due to a member of staff leaving.
‘Nevertheless… I accept it was our responsibility to secure the licence. I also take responsibility for not finding this information yesterday and bringing it to your attention.’
The Prime Minister is desperate to exonerate Ms Reeves in order to avert the political catastrophe of losing his Chancellor less than a month before one of the most critical Budgets of the modern era.
Ms Reeves finally applied for a licence on Friday, but failing to obtain a licence is a criminal offence and can be punished with an unlimited fine on prosecution, a fine of £30,000 as an alternative to prosecution, or an order to pay back up to 12 months’ rent – almost £38,000 in Ms Reeves’ case.
Southwark council advises tenants to apply to a tribunal to recoup rent if a landlord has not had an appropriate licence.
No 10 insists that Ms Reeves’ housing scandal is different from that of Angela Rayner, who was forced to resign in September over her failure to pay £40,000 in stamp duty.
Asked if the Chancellor was ‘unsackable’ as she is due to deliver the Budget, the PM’s spokesman said: ‘These are distinct and separate cases. There was a ruling from the independent adviser in this case.
‘The Prime Minister agrees with that and sees no need for any further action.’
When asked about the Knight Frank advice, Ms Reeves’ spokesman said: ‘You have the conclusion of Laurie Magnus, and the exchange of letters from October 30 where Rachel Reeves references correspondence from Harvey & Wheeler that says a Selective Licence would be required.’
HOW CHANCELLOR’S STORY HAS CHANGED…
Rachel Reeves faces renewed pressure as The Mail On Sunday reveals a second estate agent she would need a rental licence on her south Dulwich home
Wednesday, Oct 29
18.32 Rachel Reeves’ spokesman tells the Daily Mail that she ‘had not been made aware of the licensing requirement’ but as soon it was brought to her attention, she took immediate action and applied for one.
23.26 Downing Street releases a letter in which the Chancellor tells the Prime Minister: ‘Regrettably, we were not aware that a licence was necessary’ and apologises for an ‘inadvertent mistake’. Sir Keir Starmer replies by saying it was ‘regrettable’ the licence was not sought sooner but accepts her apology as a sufficient resolution of the matter.
Thursday, Oct 30
16.14 No 10 reveals Sir Keir and his independent adviser on Ministerial standards, Sir Laurie Magnus, have been passed ‘new information’ on emails sent and received by the Chancellor’s husband regarding their rental arrangement but says it would be ‘inappropriate to comment further’.
17.45 Reeves reveals the existence of emails between her lettings agency Harvey & Wheeler and her husband Nicholas Joicey showing that he had been told that letting out the family home would require a licence. One message from the agent in July last year reads: ‘We will need to apply for a licence under the Selective Licensing Scheme via Southwark council.’
In a further letter to the PM, Ms Reeves said the emails showed the agent agreed to apply for the licence but did not do so due to a member of staff leaving.
But she adds that ‘I accept it was our responsibility to secure the licence’ and also takes ‘responsibility for not finding this information yesterday’.
In a rebuke to the Chancellor, Sir Keir replies that it was ‘clearly regrettable’ that the information in the emails wasn’t shared with him the day before but still says he regards this as an ‘inadvertent failure’ with no need for further action. Sir Laurie says he found ‘no evidence of bad faith’.
Saturday, Nov 1
11.29 Asked to comment on The Mail on Sunday’s revelation that Ms Reeves was also warned by estate agent Knight Frank – as well as Harvey & Wheeler – that she would need a licence, the Chancellor’s spokesman refers simply to Sir Laurie’s opinion on October 30 and the published email correspondence with Harvey & Wheeler that says a licence would be required.
