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A neighbour of Rachel Reeves's family home has said the Chancellor should have known better after it emerged she unlawfully rented out the property. Ms Reeves should have obtained a £945 licence from the local council before letting her house when she moved into 11 Downing Street, as revealed by the Daily Mail. The neighbour in Sydenham, south London, who asked not to be named, said: 'I'm sure it was a mistake, but as a landlady, Rachel should have done her research and known she had to licence the property.' The four-bedroom detached house, which was advertised for rent at £3,200 a month last year, forms part of a leafy mid-century estate popular with affluent retirees. A Brazilian woman answered the door at the premises on Thursday, saying her friend had allowed her to stay there. It is unclear who actually rents the property from the Chancellor. A press officer from the local Labour Party was dispatched to stand outside the house today and 'stop journalists from annoying the neighbours'. He told reporters that all the neighbours were 'friends with Rachel' so wouldn't want to say anything. Set at the top of a winding private road, the timber-frame home boasts views of protected woodland surrounding the nearby Sydenham Hill, where trains into central London take 15 minutes. The landscaped estate was designed in 1966 by Malcolm Pringle of Austin Vernon and Partners, a firm of architects that helped rebuild parts of South London after the Second World War. It was one of a series of schemes designed to integrate with the area's natural environment. All the houses are timber framed because the steep sloping hills prevented easy access for normal heavy building materials. It is considered a remarkable area of mid-century architecture. According to a listing for another property on the estate, the houses are 'renowned for their Scandinavian aesthetic, with clean lines, large windows and hardwood floorboards'. The property is surrounded by Dulwich and Sydenham Woods, which are a wildlife nature reserve. Nearby facilities include a golf course, allotments and sports club grounds, providing an unbroken green space. Other local attractions include the town centres of Crystal Palace and Dulwich Village, and primary and secondary state schools rated 'outstanding'. The Chancellor is struggling to contain a furious backlash over the blunder uncovered by the Daily Mail, despite Prime Minister Sir Keir Starmer desperately trying to prop her up. Ms Reeves could now be forced to hand back tens of thousands of pounds to tenants - with Tories calling for her to be prosecuted. Southwark Council has vowed to crack down on unlicensed letting, with its website advising tenants that they can get money back. It appears that could be up to £38,000 in the case of Ms Reeves - who has enthusiastically backed similar landlord licences in her own Leeds constituency. But despite previous cases going to court, Sir Keir insisted the matter is closed within hours of the news breaking. He said further investigation is 'not necessary' after receiving an apology from Ms Reeves and consulting his independent ethics adviser, Sir Laurie Magnus. Downing Street declined to say whether she had broken the ministerial code during a bad-tempered briefing with political journalists today, but denied there had been a 'stitch-up' to avoid panicking the markets. In a round of broadcast interviews, shadow chancellor Mel Stride warned that Ms Reeves' position is 'untenable'. Ms Reeves was ruthlessly mocked for the blunder in an AI-generated video branding her a 'rent queen' this morning – reminiscent of memes about Angela Rayner's failure to pay stamp duty. The Chancellor – who is less than a month from delivering a Budget that could seal the fate of the Labour government – initially suggested the letting agent had not advised her of the need for a licence. Southwark Council, the local authority, requires that private landlords in certain areas – including the one where her house is located – obtain a 'selective' licence to rent out their property. Last night, she said she was unaware of the licensing requirement and, following inquiries by the Daily Mail, applied for the licence. After the story was broken on this website, a spokesman for Ms Reeves said: 'Since becoming Chancellor Rachel Reeves has rented out her family home through a lettings agency. 'She had not been made aware of the licensing requirement, but as soon as it was brought to her attention she took immediate action and has applied for the licence. 'This was an inadvertent mistake and in the spirit of transparency she has made the Prime Minister, the Independent Adviser on Ministerial Standards and the Parliamentary Commissioner for Standards aware.' But the Chancellor has now backtracked and confessed she was actually in fact told she needed a licence before renting out her family home. In a second letter to the Prime Minister in the space of two days, Ms Reeves wrote to 'update' Sir Keir over the blunder that has plunged her into jeopardy. She said the letting agency and her husband had found correspondence from last July in which they discussed the need for a rental licence. 'The letting agent said to my husband that a Selective Licence would be required and agreed that the agency would apply for the licence on our behalf,' Ms Reeves wrote. But this contradicted the previous letter she sent Sir Keir on the matter on Wednesday night, in which she stated: 'We were not aware that a licence was necessary.' Her admission will likely increase demands for the PM's independent ethics adviser, Sir Laurie Magnus, to launch an investigation into the row. In her letter on Thursday night, the Chancellor said she had shared emails between her husband and the agency with Sir Laurie and was 'happy to answer any further questions required'. A Downing Street spokesman said: 'Following a review of emails sent and received by the Chancellor's husband, new information has come to light. 'This has now been passed to the Prime Minister and his independent adviser. It would be inappropriate to comment further.' But No 10 added Sir Keir continued to have 'full confidence' in Ms Reeves and guaranteed she will deliver the Budget on November 26. The emails are expected to be published later on Thursday. The Chancellor is struggling to contain a furious backlash over the blunder uncovered by the Daily Mail, despite Sir Keir's best efforts to support her. Tory leader Kemi Badenoch said: 'This whole thing stinks. 'The PM needs to stop trying to cover this up, order a full investigation and, if Reeves has broken the law, grow a backbone and sack her!' Ms Reeves failed to obtain a landlord licence when she placed her family home on the rental market last year as she moved into 11 Downing Street. Southwark Council has vowed to crack down on unlicensed letting, with its website advising tenants they can get money back. It appears that could be up to £38,000 in the case of Ms Reeves – who has enthusiastically backed similar landlord licences in her own Leeds constituency. The Chancellor put her four-bedroom detached house on the market for £3,200 a month last year, and her register of interests states she has received rental income since September 2024. Yet Southwark Council indicated she is unlikely to be fined as it suggested enforcement action is reserved for landlords who ignore warning letters about not having a licence. There was some further relief for Ms Reeves on Thursday evening when the lettings agency involved in her rental arrangements appeared to take responsibility for the error. Gareth Martin, owner of Harvey Wheeler, revealed his firm had apologised to the Chancellor and her husband for the 'oversight'. 'Our clients would have been under the impression that a licence had been applied for,' he added. 'Although it is not our responsibility to apply, we did offer to help with this. 'We deeply regret the issue caused to our clients as they would have been under the impression that a licence had been applied for.' Despite previous cases going to court, Sir Keir insisted the matter was closed within hours of the news breaking. The PM on Wednesday night said further investigation was 'not necessary' after receiving an apology from Ms Reeves and consulting his ethics adviser, Sir Laurie Magnus. But, on Thursday afternoon, Downing Street dramatically reopened the prospect of Sir Laurie launching a formal probe into Ms Reeves' rental arrangements when revealing the 'new information' was being looked at. Ms Reeves' husband, Nicholas Joicey, is a senior official at the Department for Environment, Food and Rural Affairs. He is currently on a one-year secondment at the Blavatnik School Of Government in Oxford. A spokesman for Southwark Council said: 'Southwark Council requires private landlords to acquire a selective licence in order to rent out their homes if they live in specific areas. 'This is in order to protect tenants and ensure landlords are complying with housing requirements, providing safe, well-maintained homes. 'Selective licences are acquired by sending applications to the council, which we then assess and approve subject to conditions. 'When we become aware of an unlicensed property, we issue a warning letter advising the landlord that they have 21 days to apply for a licence – 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. 'We cannot comment on individual cases.
