The letting agent which rented out Chancellor Rachel Reeves’ family home has apologised for an “oversight” which led to a failure to obtain the correct licence.

Gareth Martin, owner of Harvey & Wheeler, said the company’s previous property manager had offered to apply for a “selective” rental licence on behalf of their client – but this never happened as the individual resigned before the tenancy began.

He added: “We deeply regret the issue caused to our clients as they would have been under the impression that a licence had been applied for.”

Reeves has apologised for the “inadvertent mistake” but said she accepts “full responsibility”.

Downing Street has spent the day defending the chancellor, with a spokesman insisting the prime minister has “full confidence” in her.

Reeves put her four-bedroom south London home up for rent in July 2024, when Labour won the general election and she moved into 11 Downing Street.

The house falls in area where Southwark Council requires private landlords to obtain a selective licence at a cost of £945.

The chancellor said she first became aware that her property did not have the correct licence on Wednesday when the Daily Mail, who first reported the story, contacted her.

Reeves or her letting agent could face an unlimited fine if Southwark Council takes the matter to court.

The revelations come at a politically awkward time for Reeves, who is preparing for a Budget at the end of the month amidst speculation the government is planning to break a manifesto commitment not to raise income tax.

Reeves’ economic responsibility was a hallmark of Labour’s pre-election argument that they could be trusted with the nation’s finances.

But since then, questions about her personal judgement were raised after she accepted free concert tickets as well as thousands of pounds in donations for clothing.

Her political judgement was criticised after she imposed – and then reversed – cuts to the winter fuel allowance.

Errors in her CV further undermined her standing.

Now this adds to a growing list of charges at the chancellor’s door, and it is yet another day when the government completely lost control of the news agenda.

In a letter to Sir Keir Starmer on Wednesday evening, she said “we were not aware that a licence was necessary”.

“As soon as it was brought to my attention, we took immediate action and have applied for the licence,” she wrote.

However, in a second letter to the PM on Thursday, Reeves said she had found correspondence confirming that the letting agent had told her husband a licence would be required and that the agency would apply for this on their behalf.

“They have also confirmed today they did not take the application forward, in part due to a member of staff leaving the organisation,” she wrote.

“Nevertheless, as I said yesterday, 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.

“As I said to you today, I am sorry about this matter and accept full responsibility for it.”

Reeves has published the emails, which confirm the letting agent agreed to apply for the licence once the new tenant moved in.

In a statement, Mr Martin, the agency’s owner, said: “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.

“At the time the tenancy began, all the relevant certificates were in place and if the licence had been applied for, we have no doubt it would have been granted.”

After reviewing the emails, on Thursday night the prime minister’s ethics adviser Sir Laurie Magnus said he “remains of the view that this was an unfortunate but inadvertent error”.

While he did not rule on whether the ministerial code had been broken, Sir Laurie said he found “no evidence of bad faith”.

In a fresh statement, Sir Keir agreed with his ethics adviser, but added: “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.”

The prime minister said he saw “no need for any further action”.

The Conservatives have said the prime minister needs to “grow a backbone and start a proper investigation”.

Speaking on LBC, party leader Kemi Badenoch said “maybe it is the letting agents’ fault but it’s this the funny thing with Labour, it’s always somebody else’s fault.”

“Keir Starmer said law makers shouldn’t be lawbreakers, and he was very happy to chase every fixed penalty notice that occurred under the Conservatives,” she said.

“What Rachel Reeves looks like she has done is a criminal offence.

“They didn’t say it was about the seriousness of the offence. They said if the law has been broken, the law has been broken. I’m only holding them to their standards.”

“They spent five years pretending they were the most perfect people and now they had resignation after scandal after resignation, so let the ethics advisor investigate.”