Homelessness minister Rushanara Ali has resigned after reportedly hiking the rent on a property she owns by hundreds of pounds – something described by one of her tenants as “extortion”.

That was just weeks after the previous tenants’ contract ended, The i Paper said.

Four tenants who rented a house in east London from Ms Ali were sent an email last November saying their lease would not be renewed, and which also gave them four months’ notice to leave, the newspaper reported.

The property was then re-listed with a £700 rent increase within weeks, the publication added.

In a letter to the prime minister, Ms Ali said that remaining in her role would be a “distraction from the ambitious work of this government”.

She added: “Further to recent reporting, I wanted to make it clear that at all times I have followed all relevant legal requirements.

“I believe I took my responsibilities and duties seriously, and the facts demonstrate this.”

Laura Jackson, one of Ms Ali’s former tenants, said she and three others collectively paid £3,300 in rent.

Weeks after she and her fellow tenants had left, the self-employed restaurant owner said she saw the house re-listed with a rent of around £4,000.

“It’s an absolute joke,” she said. “Trying to get that much money from renters is extortion.”

Ms Ali’s house, rented on a fixed-term contract, was put up for sale while the tenants were living there, and was only relisted as a rental because it had not sold, according to The i Paper.

The government’s Renters’ Rights Bill includes measures to ban landlords who end a tenancy to sell a property from re-listing it for six months.

The Bill, which is nearing its end stages of scrutiny in Parliament, will also abolish fixed-term tenancies and ensure landlords give four months’ notice if they want to sell their property.

Something Sir Keir’s increasingly unpopular government could have done without

Jon Craig

Chief political correspondent

@joncraig

Rushanara Ali’s swift and humiliating demise is a classic example of paying the price for the politician’s crime of “Do as I say, not as I do”.

She was Labour’s minister for homelessness, for goodness’ sake, yet she ejected tenants from her near-£1m town house then hiked the rent.

A more egregious case of ministerial double standards it would be difficult to imagine. She had to go and was no doubt told by 10 Downing Street to go quickly.

MP for the East End constituency of Bethnal Green and Stepney, Ms Ali was the very model of a modern Labour minister: a degree in PPE from Oxford University.

In her resignation letter to Sir Keir Starmer, she said she is quitting “with a heavy heart”. Really? She presumably didn’t have a heavy heart when she ejected her four tenants.

She’d previously spoken out against “private renters being exploited” and said the government would “empower people to challenge unreasonable rent increases”.

She was charging her four former tenants £3,300 a month. Yet after they moved out, she charged her new tenants £4,000, a rent increase of more than 20%.

In an area represented by the left-wing firebrand George Galloway from 2005 to 2010, Ms Ali had a majority of under 1,700 at the election last year.

Ominously for Labour, an independent candidate was second and the Greens third. No doubt Jeremy Corbyn’s new party will also stand next time.

In her resignation letter to the PM, Ms Ali said continuing in her ministerial role would be a distraction. Too right.

A distraction Sir Keir and his increasingly unpopular government could have done without.

Responding to her resignation, shadow housing secretary Sir James Cleverly said: “I said that her actions were total hypocrisy and that she should go if the accusations were shown to be true.”

A Liberal Democrat spokesperson said: “Rushanara Ali fundamentally misunderstood her role. Her job was to tackle homelessness, not to increase it.”

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Previously, a spokesperson for Ms Ali said the tenants “stayed for the entirety of their fixed term contract, and were informed they could stay beyond the expiration of the fixed term, while the property remained on the market, but this was not taken up, and they decided to leave the property”.

The prime minister thanked Ms Ali for her “diligent work” and for helping to “deliver this government’s ambitious agenda”.

Sir Keir Starmer said her work in putting in measures to repeal the Vagrancy Act would have a “significant impact”.

And he said she had been trying to encourage “more people to engage and participate in our democracy”, something that would leave a “lasting legacy”.