Angela Rayner resigns from government after stamp duty controversy

Angela Rayner has resigned from government as Housing Secretary and Deputy Prime Minister.

Her resignation comes after she admitted to failing to pay enough stamp duty on her flat in Hove and the ethics watchdog found she broke the ministerial code.

Sky News also reports a wider reshuffle of the cabinet is expected, with Chancellor Rachel Reeves remaining in post but other positions now in question.

Blamed the mistake on flawed tax guidance

As previously reported on Property118, the row over Ms Rayner’s stamp duty centred on allegations she “dodged” £40,000 on an £800,000 seaside flat in Hove, East Sussex, by declaring it her primary residence.

According to The Times, Ms Rayner removed her name from the deeds of her Greater Manchester home weeks before purchasing the Hove property, enabling her to pay £30,000 in stamp duty instead of the £70,000 that would have applied if the flat were a second home.

In an emotional interview on Sky News’ Electoral Dysfunction podcast with Beth Rigby, Ms Rayner blamed the mistake on flawed tax guidance.

However, the Telegraph reported, conveyancers who handled the purchase of her flat on the south coast said that the advice they had given her had not included stamp duty advice.

Joanna Verrico, the managing director, told The Telegraph: “We acted for Ms Rayner when she purchased the flat in Hove. We did not and never have given tax or trust advice. It’s something we always refer our clients to an accountant or tax expert for.

“We probably are being made scapegoats for all this, and I have got the arrows stuck in my back to show it. We are not an inexperienced firm, but we’re not qualified to give advice on trust and tax matters, and we advise clients to seek expert advice on these.”

Highly unfortunate, that Ms Rayner failed to pay the correct rate of stamp duty

Ms Rayner voluntarily referred herself to the Independent Adviser on Ministerial Standards. Sir Laurie Magnus, the Prime Minister’s Independent Adviser on Ministers’ Interests, later concluded that she had broken the ministerial code.

The report by Sir Magnus as reported by Sky News said: “It is highly unfortunate, that Ms Rayner failed to pay the correct rate of SDLT [stamp duty] on this purchase, particularly given her status and responsibilities as the Secretary of State for Housing, Communities and Local Government and as Deputy Prime Minister.

“She believed that she relied on the legal advice she had received, but unfortunately did not heed the caution contained within it, which acknowledged that it did not constitute expert tax advice and which suggested that expert advice be sought.”

This was what Property118 reported last week with the HMRC flow chart for SDLT.

Even if the new property is to be her main residence, she would have to pay the higher rate of SDLT if the previous main residence has not been sold.

I deeply regret my decision

In a resignation letter to the Prime Minister, Ms Rayner claimed she “deeply regretted” the error.

She said: “I deeply regret my decision to not seek additional specialist tax advice given both my position as Housing Secretary and my complex family arrangements. I take full responsibility for this error. I would like to take this opportunity to repeat that it was never my intention to do anything other than pay the right amount.”

She also lists her achievements in government claiming: “The Renters’ Rights Bill will finally ban the oppressive rule of no-fault evictions and will reset the balance between renters and landlords through ground breaking protection for renters. Everyone deserves to live in a safe and decent home, and I know this legislation will deliver that for millions of people across the country.”

In response, the Prime Minister says he was “sad to be losing” Ms Rayner from government and she was a “true friend”.

He said: “Although I believe you have reached the right decision, it is a decision which I know is very painful for you. You have given your all to making the Labour Government a success and you have been a central part of our plan to make Britain fairer for working families.

“Your work at MHCLG to help build the homes that Britain needs has been hugely important and your work to create more fairness in the workplace through the Employment Rights Bill represents a very significant achievement that will change the lives of millions of people.”

Reaction to resignation

Her resignation will be seen as a huge blow to Prime Minister Keir Starmer, coming just weeks before the Labour Party conference.

It also raises questions over the future of the Renters’ Rights Bill, which Ms Rayner has championed and which is due to reach its final stages on Monday 8 September.

William Nichols, Regional Director of Lanpro said: “Angela Rayner’s resignation, after last night’s revelations, became inevitable. It is also regrettable: she had been at the forefront of some bold housing and planning policies.

“The immediate question for the industry is who now carries the baton at MHCLG. Matthew Pennycook would be a logical choice – he has shown a strong grasp of the issues and would offer continuity. But continuity is not always what’s needed. This moment could be an opportunity to rethink aspects of policy that have been less successful, particularly the emphasis on local government reorganisation.

“Local government reorganisation may be necessary, but it has distracted attention from housing delivery. In many councils, members and officers facing upheaval have been reluctant to press ahead with local plans when the future geography of their areas is so uncertain. A pause here might free ministers to concentrate on what really matters: the growth agenda or local government reorganisation.”

Lawrence Turner, director of Boyer said: “Angela Rayner’s planning reforms rightly acknowledged the scale of the housing crisis and the urgent need for bold, decisive action. Her resignation must not become an excuse for delay. The new Secretary of State now bears the responsibility to continue to unlock delivery and work to win the support of local authorities to provide the homes and infrastructure communities desperately need.

“The new Secretary of State will be judged not by words, but by outcomes. If they can build consensus across local authorities and drive real progress on housing delivery, there remains a genuine opportunity to “turbo-charge” house building within this Parliament.”

Melanie Leech CBE, chief executive, British Property Federation, said: “We hope the next Secretary of State will continue Angela Rayner’s robust support for the builders not the blockers but will also take the opportunity to rethink policies which are damaging confidence such as the surprise ban on upward only rent reviews and the delayed homes penalty.

“Most urgently, however, the new Secretary of State must work with the sector to tackle viability issues and ensure barriers to delivery are addressed. This includes a laser focus on resolving delays at the Building Safety Regulator, which are having a chilling effect on new development across the country.”

Colin Brown, Head of Planning & Development, Carter Jonas said: “I think the industry will want to know that the changes the Government has made to the planning system will remain the focus for the incoming Secretary of State, and that there will be no rowing back. There is no doubt that publication of the revised NPPF in December 2024 and the introduction of the Planning and Infrastructure Bill have been important moments, pointing to a clear change in direction to build the homes the country needs.

“The resignation letter from the former Secretary of State and the response from the Prime Minister indicate this is still central to the government’s thinking so reassurance can be derived from that.  What we would still like to see is the use of more tools to support the demand side for new housing especially with affordability remaining challenging and we hope the new Secretary of State will focus on that, together with continuing better resourcing for local planning authorities.”