Andrew Mountbatten-Windsor's Sub-Letting of Royal Lodge Cottages
Andrew Mountbatten-Windsor received rental income from sub-letting three cottages on the Royal Lodge estate, which he leased from the Crown Estate, according to a report by the National Audit Office (NAO), the public spending watchdog.
The NAO report also disclosed that King Charles III pays the rent for accommodation in royal palaces occupied by Mountbatten-Windsor's daughters, Princesses Eugenie and Beatrice, who are not working members of the royal family.
This report is the first comprehensive review of royal residences in 20 years and details that Mountbatten-Windsor, his family, and staff utilized 12 properties owned by either the Crown Estate or the Royal Household.
A Buckingham Palace spokesman stated that the report aligns with the Royal Household's commitment to transparency.
Mountbatten-Windsor paid £7.5 million for repairs when he assumed the lease for Royal Lodge, which exempted him from paying a monthly rent.
Accommodation of Princesses Eugenie and Beatrice
The NAO report highlights that Princess Eugenie resides in a property within Kensington Palace, while Princess Beatrice lives in St James's Palace.
Neither princess pays rent for these central London residences; instead, the rent is covered by the "privy purse," which is the monarch's personal income, paid to the Royal Household.
Both palaces are maintained with public funds through the Sovereign Grant.
Criticism and Palace Response
Norman Baker, a former Home Office minister and critic of royal finances, described the arrangement as "outrageous to subsidise luxury accommodation" and claimed the public is "being taken for a ride." He argued that such arrangements should no longer be sustainable and that "deference is wearing thin indeed."
"It is outrageous to subsidise luxury accommodation in this way and the public is being taken for a ride. Such arrangements should no longer be sustainable and deference is wearing thin indeed." – Norman Baker
A Palace source responded that the rent paid by non-working royals on these properties would cover any publicly funded expenditure, ensuring no additional cost to the Sovereign Grant, which finances the official duties of the monarchy.
The report does not specify the exact rent paid by the princesses, but it is intended to be 60% of the open market rate.
Background and Lease Details
The NAO investigation was prompted by controversies surrounding Andrew Mountbatten-Windsor and will be followed by an inquiry by Members of Parliament on the public accounts committee.
The report outlines a portfolio of 12 properties used by Mountbatten-Windsor and his family.
Although Mountbatten-Windsor vacated Royal Lodge earlier this year, relocating to Sandringham in Norfolk, he retains the lease on Royal Lodge until October 2026.
In addition to the main Royal Lodge building, there are eight nearby properties. Mountbatten-Windsor's lease permits sub-letting of three cottages, which he did until April 2026.
The report does not disclose the rental income amount, but Palace sources indicate the properties were rented to staff or retired staff, with income sufficient only to cover running costs.
Any rental income went directly to Mountbatten-Windsor rather than the Crown Estate, which would normally remit profits to the Treasury.
Mountbatten-Windsor also held a lease for another property called East Lodge, which the BBC previously reported would be returned to the Crown Estate.
Additional Properties and Funding
Princess Beatrice and Princess Eugenie own homes in the Cotswolds and Portugal, in addition to their royal palace residences.
The report reveals that the Crown Estate funded nearly £400,000 in repairs before the Prince and Princess of Wales moved into their Windsor residence at Forest Lodge.
Princess Michael of Kent, another non-working royal, also occupies a property in Kensington Palace, which is paid for by the privy purse.
Eleven working royals have accommodation in royal palaces rent-free in exchange for their official duties.
The report also notes that 21 other royal post-holders, including 17 military knights, reside rent-free in occupied palaces.
Purpose and Reactions to the NAO Report
The NAO report does not make judgments on value for money or draw conclusions but aims to provide information for MPs on the public accounts committee.
"Our role is to set out the facts - and that's why this is an investigation that sets out the processes and the arrangements both from the Crown Estate and the Royal Household." – Lee Summerfield, NAO director
A Palace spokesman expressed gratitude for the report, reiterating that it aligns 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." – Palace spokesman
A spokesperson for The Crown Estate stated: "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."
Concerns Raised by Former Public Accounts Committee Chair
Baroness Margaret Hodge, former chairwoman of the Public Accounts Committee, described it as "shocking" that the NAO could not determine how much rental income Mountbatten-Windsor earned from the properties he let.
She also expressed concern over the subsidies received by Beatrice, Eugenie, and Prince Michael of Kent.
"Now, is it appropriate for non-working royals to be subsidised by the taxpayer from a fund that belongs to the taxpayer?" – Baroness Margaret Hodge
"The Crown Estates is our money, it's taxpayers' money, it's not theirs, and whoever runs that has to always ensure the taxpayers' interest." – Baroness Margaret Hodge
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