Rushanara Ali has resigned as homelessness minister, Downing Street has confirmed.
The move comes after she was accused of hypocrisy over the way she handled rent increases on a house she owns in east London.
There were calls for her to step down from homelessness charities and opposition politicians.
In a letter to the prime minister she said “at all times I have followed all relevant legal requirements” but that remaining in the role would be “a distraction from the ambitious work of this government”.
The row was sparked after Ali ended her tenants’ fixed term contract in order to sell up, but then re-listed the house for rent at a higher price within six months, which is something she is currently trying to outlaw under the Renters’ Rights Bill.
In a story first broken by the the i Paper, a former tenant said she was sent an email in November giving four months’ notice the lease would not be renewed.
She said shortly after she and the three other tenants moved out, the house in east London was re-listed at a rent £700 a month higher.
In a letter to the prime minister, Ali wrote: “It is with a heavy heart that I offer you my resignation as a minister.”
Insisting that “at all times I have followed all relevant legal requirements” she added: “I believe I took my responsibilities and duties seriously, and the facts demonstrate this.
“However, it is clear that continuing in my role will be a distraction from the ambitious work of the government.
“I have therefore decided to resign from my ministerial position.”
Responding to her resignation, Prime Minister Sir Keir Starmer thanked her for her work, which he called “diligent”.
The PM praised her work to repeal the Vagrancy Act and added: “I know you will continue to support the government from the backbenches and represent the best interests of your constituents in Bethnal Green and Stepney.”
A source close to Ali said the previous fixed-term contract had been ended because the house was being put up for sale and the tenants had been told they could stay on a rolling basis while the house was on the market, but they had chosen to go.
The house was put on the market in November 2024 with an asking price of £914,995 but was reduced in February by £20,000 and the i Paper said it was only re-listed as a rental because it had not sold.
The government’s Renters’ Rights Bill is in its final stages in Parliament, and will ban landlords re-listing a property for rent, if they have ended a tenancy in order to sell, for six months.
Landlords must also give four months’ notice to tenants when the legislation is passed, which is not expected to be until at least next year.
London Renters Union spokesperson Siân Smith said Ali’s actions were “indefensible” and she “must step down” due to a “clear conflict of interest” with the Bill in its final stages.
Tory Party chairman Kevin Hollinrake was among other opposition politicians accusing Ali of “staggering hypocrisy” over the handling of the property.
After she quit, he added: “It is right that Rushanara Ali has now quit the Government following our calls for her to go.
“Keir Starmer promised a government of integrity but has instead presided over a government of hypocrisy and self-service.”
Also welcoming her resignation, a Liberal Democrat spokesperson said: “Rushanara Ali fundamentally misunderstood her role.
“Her job was to tackle homelessness, not to increase it.
“At a time of widespread political disillusionment, her actions were staggeringly irresponsible and only added insult to injury after years of delay for renters’ rights reform under the Conservatives.”
This is not the first time Ali has been criticised. She had to give up part of her ministerial portfolio last year, when she attended a conference linked to the parent company of one of the firms heavily criticised in the recent Grenfell inquiry.
Giving up her duties managing building safety and the government’s response to the Grenfell Tower fire, she said she was relinquishing her building safety brief because “perception matters”.
