The Chancellor’s housing scandal is expected to spark a surge in rent-repayment claims from tenants whose landlords have broken licensing rules, The Telegraph can reveal.

On Saturday, renters’ rights groups reported a “significant increase” in calls from tenants who had just learnt that their homes are unlicensed.

Justice for Tenants, which supports renters taking legal action, said calls about rent repayment orders had jumped 26 per cent since Wednesday, when it emerged that Rachel Reeves had been letting her south London house without the correct paperwork.

Southwark, where the Chancellor’s property is located, has generated more calls than any other council, the group said.

Al Mcclenahan, Justice for Tenants outreach lead, said Ms Reeves’s mistake had “done more to raise awareness of licensing and Rent Repayment Orders than anything else”.

Ms Reeves failed to obtain a rental licence when she placed her family home in Dulwich (above) on the rental market last year as she moved with her family into Number 11 Downing Street (main picture) - Harvey Wheeler

On its website, Southwark council directs renters worried about illegal lets to contact Justice for Tenants, which boasts a 98 per cent success rate in securing compensation for renters.

With renters able to demand up to a year’s rent over a licensing lapse, this uptick in interest is expected to trigger a wave of costly cases nationwide.

Mr Mcclenahan said: “Our helpline services have seen a significant increase in the number of enquiries from tenants who discovered their landlord is unlicensed following Wednesday’s news about the Chancellor’s own failure to license her property.”

“Now, a lot of these callers have correctly identified that their landlord lacks a licence, but misunderstand the law as their property isn’t covered by licensing rules.

“However, many concerned tenants do live in areas with additional HMO or Selective Licensing, meaning they could take action against their landlord – and get up to 12 months’ rent repaid.”

The Chancellor is understood to have applied for a licence on Friday, but could still face a rent repayment claim of nearly £40,000.

Her Dulwich Wood home sits in a “selective licensing” zone where landlords must obtain a permit costing almost £1,000. Letting without one is a criminal offence punishable by an unlimited fine or a £30,000 civil penalty, and tenants can reclaim up to 12 months’ rent.

There is currently no indication whether Ms Reeves’s tenants intend to pursue a claim.

Delicious irony

Political opponents, including Sir James Cleverly, have been quick to point out the irony of the Chancellor potentially doing “more for tenants’ rights by breaking the law than by making it.”

The shadow housing secretary pointed out that these revelations come the same week that the Government passed the Renters Rights Act, which he said “threatens to drive landlords from the market, reducing choice and forcing up prices for tenants”.

Conservative chairman Kevin Hollinrake said the greater awareness of tenants’ rights resulting from the Chancellor’s error was likely unintentional.

More in World

“I don’t suppose that was her purpose for not applying for a selective license in the first place, or indeed not to pay for it, but at least it might benefit some people,” he said.

Writing in The Telegraph, Kemi Badenoch said she did not believe the Chancellor should resign over the lapse, describing it as “a minor accidental infraction”.

But she added: “I confess to a bit of schadenfreude watching this Prime Minister, who promised a ‘whiter than white’ Government, dealing with sleaze ranging from undeclared freebies to stolen mobile phones and unpaid property taxes.

“Every week brings a new scandal and a new sanctimonious explanation for why this one doesn’t count.”

Challenging claim of ignorance

Emails published on Thursday revealed that Ms Reeves’s husband, civil servant Nicholas Joicey, had been told by their letting agent that a licence was required, contradicting her initial claim that they had both been ignorant of the legal requirement.

This claim of ignorance might have been challenging to maintain given that Southwark, it has since emerged, ran a major publicity campaign on landlord licensing, featuring billboards, bus adverts and notices in residents’ magazines.

Ms Reeves now argues that her letting agent, Harvey and Wheeler, wrongly assured her husband a licence would be obtained later, an oversight for which the estate agent has since apologised.

Despite these shifting explanations, both the Government’s independent adviser on ministerial interests, Sir Laurie Magnus, and the Prime Minister have appeared quick to move on. The former found “no evidence of bad faith”, and the latter said there would be no further action.

Southwark council also said that enforcement action would only be taken if landlords failed to acquire a license within 21 days of getting a warning notice, or if the property was unsafe.

This approach appears out of step with actions taken by other local authorities.

On Friday, opposition politicians urged Southwark council to review the case, arguing that Ms Reeves has been “renting out her property for thousands of pounds a month for over a year, and every single pound of that money has been obtained illegally”.

In a joint letter to Sarah King, the Labour council leader, Lambeth and Southwark Conservatives said it would be “totally unacceptable” for Ms Reeves “to be let off when others who make less serious mistakes are not”.