A report from the UK’s National Audit Office has revealed that Andrew Mountbatten-Windsor, formerly Prince Andrew, generated private rental income by subletting cottages on the Royal Lodge estate while occupying the 30-room Windsor mansion virtually rent-free under a controversial “peppercorn rent” arrangement. The NAO disclosed that three of the eight cottages on the Royal Lodge estate were sublet, with the income payable directly to Andrew, even though he paid only a nominal token rent for the main property under a 75-year lease signed in 2003. The watchdog said it does not know what rent was charged to the tenants, how long the subletting went on, or the total amount earned, describing the arrangement as a private matter, though it confirmed the cottages have been vacant since April.
The findings emerged as part of the NAO’s first review of royal residences in 20 years, which examined property arrangements across the monarchy and showed Andrew and his family and staff had access to 12 properties owned by the Crown Estate or the Royal Household. The report noted that Andrew took on the Royal Lodge lease after paying £7.5 million upfront for repairs and renovations, a sum that effectively removed the requirement for monthly rent and led to the lease being described as a symbolic “one peppercorn if demanded” payment. While he lived in the main house for more than two decades, he was permitted under the lease to sublet three cottages on the grounds, creating a revenue stream that has now drawn criticism from MPs and former ministers.
The NAO also revealed that Andrew’s daughters, Princess Beatrice and Princess Eugenie, live rent-free in palace apartments with costs covered by King Charles via the Privy Purse, despite neither being working royals. Norman Baker, a former Liberal Democrat minister, called the subletting arrangement “outrageous” and said there was no justification for non-working members of the royal family to be subsidised. Parliament’s Public Accounts Committee is preparing to launch an inquiry into royal property leases this year, questioning whether the Royal Lodge arrangement achieved best value for money and if taxpayers lost out on potential revenue.
Andrew was stripped of his royal titles and honours by King Charles in October 2025 amid continued scrutiny of his ties to convicted sex offender Jeffrey Epstein, and was ordered to leave Royal Lodge in February 2026. He has since moved to the king’s private Sandringham estate in Norfolk. The Crown Estate said the Royal Lodge lease contained clauses requiring the tenant to maintain the property and not use it for illegal or immoral purposes, and noted that the estate had not been safely rentable on the open market due to security requirements. The watchdog’s report has intensified debate over royal finances, transparency, and the use of Crown Estate assets, with lawmakers pressing for details on rental income and whether public funds were used for renovations or maintenance at the property.
