A new report from the National Audit Office (NAO) has revealed significant details regarding the financial arrangements of royal properties, including instances of subletting for private profit and “adjusted” rents paid by the King.
Discrepancies in Royal Property Leases
The review found that Andrew Mountbatten-Windsor received private income from subletting three cottages on his Windsor Royal Lodge estate while paying a “peppercorn rent” to the crown estate. Although sources suggest the subletting may have only covered maintenance and staff costs, no specific rental agreements or financial figures have been made public.
The findings have drawn sharp criticism from former Liberal Democrat minister Norman Baker, who stated that the arrangements for Mountbatten-Windsor added “insult to injury.” Baker suggested that the money from subletting should have gone to the crown estate rather than into personal pockets.
The report also highlights that King Charles pays an “adjusted” rent from his private Duchy of Lancaster income for the residences of Princesses Beatrice and Eugenie. These rents are set below open market value because the properties are located within secure, cordoned areas that require tenants to undergo security vetting.
Specifically, Beatrice’s apartment at St James’s Palace is rented at 68% of market value. Eugenie’s Kensington Palace cottage is set at 64%, with rates ranging from 55% to 63% between 2022 and 2025.
Management and Maintenance Costs
The NAO found that lease arrangements vary depending on whether a property is managed by the crown estate or the royal household. The crown estate, a self-funding public corporation, manages assets for the crown, while the royal household provides seven residences at no cost to 11 working royals in exchange for their official duties.
For the Prince and Princess of Wales, the crown estate carried out £400,000 in repairs to their Forest Lodge home in Windsor before they moved in last year. The couple holds a 20-year lease on the Georgian house and pays £307,200 in annual rent, which is reviewed every five years.
“Generally, we found [the crown estate] applied standard practices across the leases we examined and in line with its processes. Where we found differences, these related to specific terms within lease agreements for the same lease type,” the NAO report stated.
Looking Ahead
The details published in this report are expected to form the basis of an upcoming inquiry by the Commons public accounts committee into royal properties. This investigation may lead to further scrutiny of how lease terms are negotiated and how much private income is generated from royal estates.
A spokesperson for the crown estate noted that they welcome the review and look forward to discussing the findings with the public accounts committee. Meanwhile, Buckingham Palace expressed gratitude for the report, stating they hope the findings will help to “correct, clarify or contextualise” certain points regarding royal property arrangements.
Frequently Asked Questions
Why are some royal rents lower than the open market value?
For properties managed by the royal household, “adjusted rent” is typically 60% of the market valuation because the residences are located in secure areas requiring security vetting.
What is the difference between the crown estate and the royal household in this context?
The crown estate is a self-funding public corporation that manages assets for the crown, while the royal household provides residences to working royals at no cost in exchange for their official duties.
What will happen as a result of the National Audit Office report?
The report is expected to serve as the basis for an inquiry by the Commons public accounts committee into royal properties.
How should the financial transparency of royal estates be balanced with their security requirements?
