potentially millions on the side from subletting properties
For generations, the British Crown's residential holdings have operated according to customs that blend institutional tradition with private arrangement, rarely subjected to the scrutiny applied to ordinary public expenditure. A National Audit Office report has now drawn those arrangements into the open, revealing that a disgraced duke sublet estate cottages for personal gain while paying nominal rent, and that a king quietly subsidises the London homes of his non-working nieces from his private income. The findings arrive at a moment when the relationship between the monarchy and public accountability is itself under quiet renegotiation, and the Public Accounts Committee has signalled it intends to press further.
- Andrew Mountbatten-Windsor collected undisclosed subletting income from three Royal Lodge cottages for over two decades while his own rent amounted to little more than a symbolic gesture — a arrangement that has now ended but left no public financial record.
- King Charles has been paying full market rent on behalf of Princesses Beatrice and Eugenie, both privately employed and independently wealthy, using income from the Duchy of Lancaster that critics argue should not stretch to subsidising non-working royals.
- Valuations underpinning those rents were frozen at 2018 and 2020 figures until this year, meaning the discounts were even deeper than the headline percentages suggest — a detail the NAO has flagged as a value-for-money concern.
- A former government minister has described the cumulative picture as contempt for the taxpayer, warning that the royal family risks being seen as exploiting public goodwill through opaque and self-serving property deals.
- The Public Accounts Committee will now use the NAO findings as the foundation for a formal inquiry, meaning the scrutiny applied so far may be only the opening chapter of a longer reckoning.
A National Audit Office investigation has laid bare the quiet complexity of how the royal family occupies, manages, and profits from its residential properties — and the findings have not flattered the institution.
The most striking case concerns Andrew Mountbatten-Windsor, who for more than twenty years held a lease on Royal Lodge in Windsor Great Park at a peppercorn rent — a token fee with no relation to market value. Under terms agreed in 2003, he reduced his upfront payment to £1 million by committing to £7.5 million in renovations, which the Crown Estate confirmed he carried out. During that same period, he sublet three cottages on the estate, with the income flowing to him rather than back to the Crown. The precise sums remain private; those close to the arrangement say the money merely covered maintenance and staffing, but no documentation has been published to support that claim. The subletting ended in April 2026, shortly after Andrew left Royal Lodge for a property on the King's Sandringham estate.
The report also examines the housing costs of Andrew's daughters, Beatrice and Eugenie, neither of whom carries out official royal duties. Both hold private employment and, in Beatrice's case, a wealthy spouse. Nevertheless, King Charles pays their full rent — for apartments at Kensington Palace and St James's Palace respectively — from his Duchy of Lancaster income. Those rents were calculated against valuations dating from 2018 and 2020 until this year, and even the updated 2026 figures leave both women paying between 64 and 68 percent of open market value. Norman Baker, a former Liberal Democrat minister, called the arrangements an act of contempt toward taxpayers, arguing that non-working royals with independent means have no claim on the Duchy's resources.
Not every royal arrangement drew criticism. The Prince and Princess of Wales signed a 20-year lease on Forest Lodge at £307,200 a year, with no upfront deposit in exchange for covering internal refurbishment themselves. The Crown Estate spent just under £400,000 on structural, heating, fire safety, and plumbing work before they moved in — a sum that exceeded the average English house price, though the NAO noted it was proportionate to the scale of the property. Their lease includes five-yearly rent reviews tied to inflation and a right to pass the tenancy to their children.
The NAO's broader survey found that working royals receive official residences at no cost, while staff across 255 Royal Household properties contribute a fixed proportion of their salary toward housing. Andrew's lease was the only one in the sample to include an early surrender clause, which will determine a compensation payment — estimated somewhere between £300,000 and £490,000 — once the Crown Estate completes its condition assessment. The Public Accounts Committee has indicated it will use the report as the starting point for a wider inquiry into whether these arrangements represent genuine value for money.
A National Audit Office investigation into the royal family's property arrangements has exposed a tangle of subsidies, minimal rents, and undisclosed income that has drawn sharp criticism from former government officials and raised questions about how public money flows through the Crown's residential holdings.
At the center of the report sits Andrew Mountbatten-Windsor, who for more than two decades sublet three cottages on the Royal Lodge estate in Windsor Great Park while himself paying what amounts to a nominal rent. The lease terms, negotiated in 2003, allowed him to reduce his upfront capital payment to £1 million—down from a higher figure—by committing to spend £7.5 million on renovations, which the Crown Estate confirmed he completed. In exchange, he paid a peppercorn rent, the traditional term for a token annual fee that bears no relation to market value. The subletting of those three cottages generated income that flowed directly to him rather than back to the Crown Estate, though the exact figures remain private. Sources close to the arrangement have suggested the subletting merely covered maintenance and staff costs, but no rental agreements or financial documentation has been made public to verify this claim. The subletting finally ended in April 2026, months after Andrew vacated Royal Lodge in favor of the King's private Sandringham estate in Norfolk.
The NAO report also scrutinizes the housing arrangements for Andrew's daughters, Princess Beatrice and Princess Eugenie, both of whom are classified as non-working royals despite holding private employment. Beatrice, 37, is married to a property developer with substantial wealth; Eugenie, 36, also works outside the royal household. Yet King Charles pays their full rent from his private Duchy of Lancaster income—the Privy Purse—for apartments at St James's Palace and Kensington Palace respectively. Until this year, those rents were calculated using valuations from 2018 and 2020, figures now acknowledged as outdated. Eugenie's rent at Ivy Cottage was set at 50 percent of the 2018 open market value in 2020-2021, gradually rising to 63 percent by 2025. Beatrice's apartment rent followed a similar trajectory, ranging from 60 percent to 68 percent of the 2020 valuation over the same period. Current rates, based on 2026 valuations, now stand at 64 percent and 68 percent respectively—still discounted from full market rent.
Norman Baker, a former Liberal Democrat minister, characterized the arrangements as contemptuous toward taxpayers. "It shows an absolute total contempt for the taxpayer," he said, "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." He added that non-working members of the royal family should not be subsidized by the Duchy of Lancaster, describing the situation as the royal family "taking the public for a complete ride."
The report also examined the Crown Estate's £396,993 investment in refurbishing Forest Lodge, the new home of the Prince and Princess of Wales, before they moved in last autumn. William and Kate have avoided peppercorn rent accusations by signing a short-term 20-year lease at £307,200 annually—£76,800 paid quarterly—with no upfront deposit because they are covering internal refurbishment costs themselves. The Crown Estate's repairs, which exceeded the average English home price of £268,000, included structural work to the main house, heating and plumbing systems, fire safety upgrades, and similar work on three accompanying cottages and a barn across the 7.4-hectare property. The couple's lease includes a rent review every five years tied to inflation, with increases capped between 3 and 5 percent, and they retain the right to pass the lease to their children.
The NAO found that royal rent and lease arrangements vary significantly depending on the property's purpose and whether it is managed by the Crown Estate or the Royal Household. Working members of the royal family—those performing official duties—receive seven residences within occupied royal palaces at no cost, along with 21 other post-holders including military knights and clergy. The Royal Household manages 255 residential properties overall, with 145 occupied by staff who contribute 16.7 percent of their gross pensionable salary toward housing costs. Andrew's lease with the Crown Estate was the only one in the NAO's sample to include an early surrender clause, a distinction that may affect any compensation he receives for relinquishing the property—a figure estimated between £301,967 and £488,342 depending on the property's condition, though the final amount remains unknown pending the Crown Estate's assessment. The report will now form the basis of the Public Accounts Committee's broader inquiry into royal property arrangements and value for money.
Notable Quotes
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.— Norman Baker, former Liberal Democrat minister
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.— Norman Baker
The Hearth Conversation Another angle on the story
Why does Andrew's subletting arrangement matter if he was just covering costs?
Because we don't know that for certain. No figures were released—no repair costs, no rental income, nothing. He potentially made significant money while the Crown Estate got nothing, and the public has no way to verify the claim that it was break-even.
But Beatrice and Eugenie have jobs. Why is the King paying their rent at all?
That's the core question. They're not working royals in the official sense—they don't perform state duties. They have independent income and wealth. The subsidy comes from Charles's private Duchy income, but it's still a royal privilege most people don't have access to.
Is the rent they pay actually discounted, or is it just calculated differently?
It's discounted. They're paying 64 to 68 percent of what the market would charge. For comparison, William and Kate pay full market rate—they just negotiated favorable terms around who covers repairs.
What makes William and Kate's arrangement different?
Transparency and market discipline. They signed a formal lease at a published rate, with regular reviews tied to inflation. There's no mystery about what they pay or why. Andrew's peppercorn rent and the daughters' subsidized rents lack that clarity.
Will anything actually change because of this report?
The Public Accounts Committee will investigate further. But the royal family controls much of the information—exact figures remain private, rental agreements aren't public. Real change would require forcing disclosure of the numbers and rethinking who gets subsidized housing.
Is this about money or principle?
Both. The money matters—potentially millions in undisclosed income, taxpayer subsidies for wealthy non-working royals. But the principle is bigger: should the public fund royal housing arrangements they can't see or question?