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Rushanara Ali, the Parliamentary Under-Secretary of State for Homelessness and Rough Sleeping, has resigned amid claims she evicted tenants from an East London property, then re-listed it weeks later for £700 more a month when it did not sell.

The minister had been accused of hypocrisy and calls were made by opposition politicians for her to step down.

The i Paper reported that Ali’s previous tenants were told in November last year their fixed-term contract would not be renewed because the property was being put up for sale.

Shortly after they left the property, they became aware it had returned to the market with the monthly rent increased from £3,300 to £4,000.

The Renters’ Rights Bill, due to come into force next year, will ban landlords who have ended a tenancy in order to sell a property from relisting it for a higher rent.

The bill will also end the use of fixed-term tenancies and force landlords to give four months' notice to tenants.

In a resignation letter sent to the Prime Minister, Ali insisted that she had at all times followed all relevant legal requirements.

She wrote: “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.”

Ali claimed various achievements in the role, including working alongside Deputy Prime Minister Angela Rayner to secure “record investment in social and affordable housing, and nearly a billion pounds of funding to alleviate homelessness and rough sleeping.”

She also said she was proud to have delivered the Government’s election strategy.

Sir Keir Starmer, in his response, thanked Ali for her “diligent work” in government, praising her contribution in the measures to repeal the Vagrancy Act, which he said would have a significant impact.

Mairi MacRae, the director of campaigns and policy at Shelter, told The Guardian: “It beggars belief that after months of dither and delay, the government’s own homelessness minister has profited from the underhand tactics the Renters’ Rights Bill is meant to outlaw.”

Kevin Hollinrake, the Conservative party chair, accused Sir Keir Starmer of presiding over “a government of hypocrisy and self-service”.

He told the BBC: “It is right that Rushanara Ali has now quit the government following our calls for her to go.”

Harry Rodd

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