The Chancellor wrote to Prime Minister Keir Starmer, informing him that she had let out her family home through an external lettings agency without a selective rental licence while she lives at 11 Downing Street.
The property is situated in the Dulwich Wood ward of Southwark Council, which operates the selective licensing scheme and requires landlords to obtain a licence before letting out certain properties.
Local authorities can elect to implement the scheme, and Southwark Council charges up to £945 for a selective licence.
Reeves wrote that she had made an “inadvertent mistake” and that she had applied for a licence as soon as she became aware.
Starmer wrote back to Reeves to say it was “regrettable” that the licence had not been obtained sooner, but the matter would not be investigated by the Ministerial Standards.
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He wrote: “The Ministerial Code makes clear that in certain circumstances, an apology is a sufficient resolution. It is important that all ministers are able to acknowledge where they consider themselves to have fallen below the standards expected of them.
“I am satisfied that this matter can be drawn to a close following your apology.”
Landlords who fail to register for a licence could face fines of up to £30,000 or be prosecuted.
Speaking to ITV News, Badenoch said some landlords had paid thousands for lettings registrations and “special rules” should not be made for Reeves.
Badenoch added: “She needs to do her job, she is the Chancellor, a lot of people have lost their jobs because of bad decisions that she made… If she is breaking the law, then yes, she should go.”
