Rachel Reeves's estate agent has apologised to her for failing to apply for a rental licence on her behalf after offering to do so.
The firm said "we deeply regret the issue caused to our clients" in a statement which appeared to draw a line under the row following howls for the Chancellor to be sacked by the Tories. No10 also insisted they had full confidence in Ms Reeves, who will now press ahead with work on next month's crucial Budget.
It came after she was forced to apologise to Keir Starmer and his ethics adviser for the error on her family home in Dulwich, south London. She put the south London home - owned with her husband - in rental after moving into No11 Downing Street following Labour's election victory last summer.
But on Wednesday she was made aware the property did not have a "selective licence" required by the local authority Southwark council. It led to the Tories calling for her to be sacked for flouting housing regulations.
Ms Reeves published emails on Thursday between her husband and the agency showing that Harvey & Wheeler had agreed to apply for the licence, while telling the Prime Minister she still accepted "full responsibility" for the matter.
Estate agent owner Giles Martin 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."
He added: "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.
"Our clients would have been under the impression that a licence had been applied for. 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."
On Thursday the government released two chains of emails dated between July 17 and August 13, 2024 in which the Chancellor's husband, Nicholas Joicey, and the firm discussed the necessary steps to rent out the south London home.
In one email dated July 26, Harvey & Wheeler said the licence will cost £900, adding: "You will pay in two parts, so £640 first and then once the application has been processed then the remaining £260.00 is taken." The emails from the letting agent also say they "will do the selective licence once the new tenant moves in".
In a letter to the PM, Ms Reeves added on Thursday: "Today the letting agency and my husband have found correspondence confirming that on 17 July 2024 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.
"They have also confirmed today that they did not take that application forward, in part due to a member of staff leaving the organisation. 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."
It also appeared no action would be taken against Ms Reeves by Southwark council for the the failure to obtain a licence. They did not comment directly on the Chancellor's case but said enforcement action such as fines are reserved for landlords who ignore warning letters about not having a licence.
Ms Reeves immediately applied for the licence when she became aware of her error. A spokesperson for the 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."