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Chancellor Rachel Reeves could be ordered to repay more than £38,000 in rent after admitting breaching housing rules by unlawfully renting out her family home without a licence. Southwark council, which runs the borough where Reeves rented out the home, says tenants have the right to apply for a refund of their rent during the period in which the property was let out without a licence. Reeves rented out her family home for £3,200 a month after entering Downing Street last year, and the council states that repayment orders can cover “up to 12 months’ rent”, indicating that she could be liable for as much as £38,400. The council has also fined people for failing to rent out properties without a licence. In one instance last year, it imposed penalties of more than £3,000, split between the property owner and letting agent. Fines by Southwark Council for property licence breaches can be “unlimited”, although this is to cover significant breaches by landlords renting out unsafe properties, of which Reeves is not accused. Fines can be reduced for self-reported errors. The potential penalties the chancellor faces are of a similar magnitude to the £40,000 Angela Rayner, the former deputy prime minister, failed to pay in stamp duty, which led to her resignation in September. Reeves and her husband used a lettings agency to rent out the family home in Dulwich after they moved into a flat in Downing Street following Labour’s general election victory last year, according to people familiar with the matter. People close to Reeves said the chancellor did not receive advice that a rental licence was required. But Southwark council, like many local authorities, requires private landlords to obtain a “selective” licence to rent out property in certain areas. The estate agent Reeves used to rent out the property did not immediately respond to a request for comment. Sarah Jones, the UK’s policing minister, told Times Radio that Reeves would not be sacked. Prime Minister Sir Keir Starmer said in a letter on Wednesday night that while it was “regrettable” Reeves had not sought the correct licence, he had concluded that an apology was sufficient after consulting with the ethics adviser Sir Laurie Magnus. Reeves consulted Laurie Magnus, pictured, about her breaching housing rules © Paul Quezada-Neiman/Alamy Starmer rejected the need for a formal investigation into a potential breach of the ministerial code, despite Conservative party leader Kemi Badenoch suggesting Reeves may have to leave her position. Labour MPs privately expressed dismay at Reeves’ error, drawing parallels with Rayner. The debacle comes as Reeves prepares what is expected to be a tax-raising Budget on November 26, with Labour trailing in opinion polls, despite promising last year that she would come back with further tax increases. “If the chancellor cannot even get on top of her own paperwork, how is she going to get on top of the country’s paperwork?” Badenoch said on Thursday. Recommended UK politics Budget, boats and a by-election Reeves has previously been a supporter of selective licensing by councils, praising Leeds city council’s decision to expand its selective landlord licensing policy to the Armley area of her constituency. On Wednesday, Reeves informed Starmer, as well as Magnus and the parliamentary commissioner for standards, according to her spokesperson, and described it as an “inadvertent mistake”. “As soon as it was brought to my attention, we took immediate action and have applied for the licence,” she added, saying she “sincerely apologised” for the error. The Daily Mail, which first reported the story, said Reeves had put the four-bedroom detached family home on the market at a monthly rent of £3,200 last year.