Andrew sublet Royal Lodge homes and King pays Beatrice and Eugenie’s rent – report
Andrew Mountbatten-Windsor received an undisclosed private income from subletting three cottages on his Royal Lodge estate while paying a peppercorn rent for more than two decades, an investigation has shown.
The National Audit Office has published a report into the royal family’s residential property arrangements after controversy surrounding the disgraced former duke’s lease of the Crown Estate home.
Other findings by the public spending watchdog include the revelation that the King foots the bill for Princess Beatrice and Princess Eugenie’s accommodation in royal palaces despite both Andrew’s daughters being non-working royals.
And for a number of years, their adjusted rents – reduced because the Royal Household properties require tenants with security clearance – were based on out-of-date open market valuations.
Former Liberal Democrat minister Norman Baker, who has long been a critic of royal finances, branded the arrangements “outrageous”.
“The whole thing is outrageous. If you look at Andrew, this is adding insult to injury,” he said.
“It shows an absolute total contempt for the taxpayer, not only that Andrew was able to have a peppercorn rent for a gigantic property, but then to make potentially millions on the side from subletting properties.
“The money should have gone to the Crown Estate, not into (his) pockets.”
He added of Beatrice and Eugenie: “There’s no way that non-working members of the royal family should be subsidised by the Duchy of Lancaster.
“The royal family is yet again taking the public for a complete ride.”
Sources suggested Andrew’s subletting did not generate a profit and that the rent was set at a rate to only cover maintenance and running costs for staff living there.
But no figures, such as repair and household costs versus rental income, or copies of the rental agreements, have been made public.
Andrew was photographed on Thursday with what appeared to be a large facial bruise, though it is understood not to be a cause for concern.
The NAO report stated: “Three cottages on the Royal Lodge estate were also sublet with income generated from subletting payable to Andrew Mountbatten-Windsor.”
Up until this year, Eugenie’s rent of Ivy Cottage in Kensington Palace was based on a 2018 valuation and Beatrice’s apartment in St James’s Palace on a 2020 valuation.
Eugenie’s rent was 50% of the 2018 open market value from 2020 to 2021, and ranged from 55% in 2022 to 63% in 2025, while rent on Beatrice’s was 60% of the 2020 market value from 2020-2021 and ranged from 62% to 68% between 2022-2025, the NAO said.
The current rental rates are now 64% of a 2026 open market valuation for Eugenie, and 68% of a 2026 valuation for Beatrice.
But both rents are paid to the Royal Household entirely by Charles out of the Privy Purse, which is made up of his Duchy of Lancaster income and other private funds.
For the properties rented to Beatrice and Eugenie, rent paid by the King is said to cover maintenance and operational costs met by the Sovereign Grant for the homes, with no additional cost to the grant as a result.
The Sovereign Grant, which pays for the royal family’s official duties and the upkeep of royal palaces, is met from public funds in exchange for the King’s surrender of the revenue from the Crown Estate.
The King’s nieces Eugenie, 36, and Beatrice, 37, are non-working royals who both have jobs, with Beatrice married to a multimillionaire property developer.
The princesses faced scrutiny when their names appeared in the recent Jeffrey Epstein files, with one email exchange suggesting their mother Sarah Ferguson took them to see the convicted paedophile in the US days after he was released from prison for child sex crimes.
It is understood that the arrangements were put in place by the late Queen Elizabeth II for her granddaughters, and Charles continued paying for their rent at his discretion when he became King.
Financial matters at the Royal Household are, however, kept under regular review.
Eugenie is said to have carried out refurbishments at Ivy Cottage at her own expense.
The sisters lived together at St James’s Palace from 2008 before Eugenie moved to Kensington Palace in 2018.
Andrew was entitled to sublet up to three properties on the Royal Lodge estate in Windsor Great Park under the terms of his lease.
No details of how much he earned through subletting – an amount that is not returnable to the Crown Estate – or how much the King pays for Eugenie and Beatrice’s rent were released by the NAO, with the watchdog saying the amounts were private.
The late Queen’s second son, who was arrested on suspicion of public misconduct in February and stripped of his prince title and dukedom by Charles over his friendship with sex offender Epstein, was not asked to provide the information.
It is also not known whether Andrew’s sublet properties were consistently rented out, but his subletting of the residences ended in April 2026.
He finally quit Royal Lodge earlier this year, moving to the King’s private Sandringham estate in Norfolk.
It has been widely reported that Andrew may not receive the compensation he is due for giving up his lease, which would be a payout of between £301,967 and £488,342, depending on the condition of the property and the date the lease is officially surrendered.
But the amount he will receive, if any, is still not known because the Crown Estate is waiting to assess the final state of the property.
The NAO described Andrew’s lease agreement as the only one with an early surrender clause in the sample it examined.
He retains the lease until October this year. It was negotiated in 2003 on the basis he would spend £7.5 million renovating the property, which the Crown Estate confirmed he did.
This reduced his capital premium payment to £1 million, alongside a peppercorn rent.
The then-York family had a total collection of 12 properties within the Crown Estate and the Royal Household in 2025.
Leased from the Crown Estate, Andrew had Royal Lodge which consists of the mansion plus eight properties known as the Main Gate Cottages, three of which could be sublet; plus a lease of Staff Lodge 2 – known as East Lodge – at his former marital home Sunninghill Park for a staff member, which he requested to surrender in February.
Beatrice’s St James’s Palace apartment and Eugenie’s Ivy Cottage home are Royal Household properties within the occupied royal palaces.
The report, which did not assess value for money, will form the basis of the Public Accounts Committee’s inquiry into royal properties.
The NAO found rent and lease arrangements for the royals differed depending on why the accommodation was required and whether the property was managed by the Crown Estate or the Royal Household.
It said a total of three properties in the occupied royal palaces are rented to non-working royals – Beatrice, Eugenie, as well as Prince and Princess Michael of Kent, whose Kensington Palace apartment rent is also being paid for by the King.
The Household’s policy is to typically charge an adjusted rate of around 60% of open market value – but the NAO found the rate set is not consistent and not typically at 60%, with the Kents’ property in Kensington Palace having no record of valuation of the lease prior to 2026.
The late Queen’s cousin and his wife Marie-Christine were dubbed the “Rent-a-Kents” and sparked a scandal when it emerged in 2002 they paid a peppercorn rent of just £69 a week to live in the grand Apartment 10, maintained by the taxpayer, despite not being working royals.
MPs on the Commons’ Public Accounts Committee demanded they pay full rent, but the couple argued that Queen Elizabeth II had given them the use of the Palace as a wedding present.
The late Queen came to the rescue, offering to pay a commercial rate rent of £120,000 a year on their behalf, until they had to find the sum themselves after the end of 2009.
But the new NAO report revealed, in contrast, that their rent is now paid by the King from the Privy Purse.
It would appear that, in actual fact, the Kents never paid for their own rental costs, despite Buckingham Palace confirming in late 2009 that they would start paying for it themselves on January 1 2010.
Towards the end of the seven-year deal, the late Queen subsequently agreed to continue the private funding, but this was not made known publicly, and the King has continued to honour his mother’s commitment to the couple, who are now in their eighties, the Press Association understands.
It is not known exactly how much the current rent is – but it has now increased 34% between 2020 and 2026, and is 63% of a 2026 open market valuation, the NAO said.
Meanwhile the Crown Estate paid nearly £400,000 in 2025 to refurbish the Prince and Princess of Wales’s new home Forest Lodge and three of its accompanying properties before they moved in last autumn.
William and Kate have avoided peppercorn rent accusations by paying £307,200 a year for the home.
The report showed they have signed a “short-term 20-year lease” with quarterly rent payments, which come to £76,800 every three months, and no upfront deposit because the couple are paying for all internal refurbishment costs.
But, prior to William and Kate moving in, the Crown Estate funded repairs at the mansion, two of three cottages on the site, the barn and the grounds in line with its obligations as a landlord.
The renovations totalled £396,993, exceeding the average value of a property in England which stands at around £268,000, according to the UK House Price Index.
The tenancy covers the Grade II listed Georgian house, gardens, paddock with 7.4 hectares, a barn, and three cottages – No 1, 2 and 3 Stables Cottages.
The breakdown of repair costs is as follows:
– £213,353 – Forest Lodge and surrounding property grounds including heating and plumbing, structural repairs to ceilings, floor, stairs, fire alarms, brickwork, boilers, stabilising external walls for safety, and similar works to ensure safety and compliance.
– £48,575 – No 2 Stable Cottages – used for staff
– £90,626 – No 3 Stable Cottages – used for staff
– £44,439 – The Barn
No landlord works were carried out to No 1 Stable Cottage in 2025 as the previous tenant did not leave until January 2026.
As the prince and princess have signed a short term lease, repair and refurbishment costs of Forest Lodge fell to the Crown Estate.
They face a rent review every five years in line with the Consumer Price Index, with increases no less than 3% and no more than 5%.
The couple can also pass the lease on to all or any of their children, Prince George, Princess Charlotte and Prince Louis, in the future.
The Waleses also have a lease for Staff Lodge 1 on the Windsor estate, which has an annual rent of £19,800 and is occupied by a staff member.
In other findings, the Duke and Duchess of Edinburgh were shown to pay a peppercorn rent after signing a long lease of 150 years in 2007 for Bagshot Park in Surrey with a payment of £5 million, and Edward’s company Eclipse Nominees Limited listed as the leaseholder.
They also held a previous lease from 1998 to 2007, with a committed restoration spend of £1.38 million
Edward and Sophie, like Andrew, are also entitled to sublet on the estate, and generated a private income after renting out the stable complex at Bagshot Park to a third party up to 2020.
Seven members of the royal family occupy five properties leased from the Crown Estate but the lease terms vary, reflecting factors including upfront premium payments, refurbishment costs and any early surrender clause.
As well as William, Kate, Andrew and the Edinburghs, the late Queen’s cousin Princess Alexandra lives in Thatched House Lodge in Richmond Park, which is leased to THL Trust.
She currently pays an annual ground rent of £1,500, which alters depending on time lapsed, after a premium payment of £670,000 in 1995, following a previous lease in 1971.
Her daughter Marina Ogilvy has an assured shorthold tenancy on a cottage on the Windsor Estate, and pays an annual rent of £17,436.
The Royal Household meanwhile provides 11 working members of the royal family with seven residences within the occupied royal palaces at no cost in exchange for their official duties.
The royals are William and Kate – who have Apartment 1A in Kensington Palace; the Duke and Duchess of Gloucester; the Duke of Kent; the Princess Royal; the Duke and Duchess of Edinburgh; Princess Alexandra; and the King and Queen.
In addition, 21 other post-holders including 17 military knights performing ceremonial duties, three military secondees and a member of the clergy hold accommodation at no charge within the occupied royal palaces.
The Royal Household manages 255 residential properties, with 145 used by staff required to live in, who pay 16.7% of their gross pensionable salary towards accommodation costs.
A spokesperson for The Crown Estate, said: “The Crown Estate welcomes the National Audit Office’s review which confirms its leases with members of the royal family were agreed in line with independent, professional advice and open market valuations.
“We look forward to discussing the report further with the Public Accounts Committee in due course.”
A Buckingham Palace spokesperson said: “We are grateful to the National Audit Office for this report, which is in line with the royal household’s commitment to transparency.
“We hope that the findings will help correct, clarify or contextualise a number of points regarding royal properties.
“As the report notes, arrangements for properties managed by the royal household vary based on a number of factors to ensure residences are filled appropriately, depending on their location, tenants and purpose.”
Published: by Radio NewsHub