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NAO report exposes royal residence arrangements
The UK's public spending watchdog has revealed that Andrew Mountbatten-Windsor, formerly the Duke of York, earned undisclosed rental income from sub-letting cottages on the Royal Lodge estate, which he leased from the Crown Estate. The National Audit Office (NAO) report, the first on royal residences in two decades, also shows that King Charles covers the rent for non-working royals, including Mountbatten-Windsor's daughters, Princesses Eugenie and Beatrice, in palace properties.
Royal Lodge lease and sub-letting details
Mountbatten-Windsor secured a lease for Royal Lodge, a 30-room property in Windsor Great Park, without monthly rent after investing £7.5 million in repairs. The lease, which runs until October 2026, allowed him to sub-let three of the estate's eight cottages until April 2026. While the NAO report does not disclose the rental income he received, Palace sources indicate the amounts were used to cover running costs and were paid by staff or retired staff.
Despite moving to Sandringham in Norfolk earlier this year, Mountbatten-Windsor retains the lease on Royal Lodge. The Crown Estate, which owns the property, will receive profits from the lease, which are returned to the Treasury.
Non-working royals benefit from subsidised palace homes
Princesses Eugenie and Beatrice, who do not carry out official royal duties, reside in properties at Kensington Palace and St James's Palace, respectively. The rent for these homes is paid by the King's private funds, known as the privy purse, rather than by the princesses themselves. Both palaces are maintained using public funds through the Sovereign Grant, which finances the monarchy's official duties.
Princess Michael of Kent, another non-working royal, also occupies a property in Kensington Palace, with rent similarly covered by the privy purse. The NAO report notes that the rent paid for these properties is intended to cover publicly funded expenditure, ensuring no additional cost to the Sovereign Grant. However, the exact amounts remain unspecified, though they are reportedly set at 60% of the open market rate.
Public funding and royal property portfolio
The NAO report highlights that Mountbatten-Windsor and his family had access to 12 properties, either owned by the Crown Estate or the Royal Household. In addition to Royal Lodge, Mountbatten-Windsor held a lease for East Lodge, which he has since agreed to return to the Crown Estate. His daughters also own private homes in the Cotswolds and Portugal.
The Crown Estate also funded nearly £400,000 in repairs before the Prince and Princess of Wales moved into their Windsor home, Forest Lodge. Meanwhile, 11 working royals live in palace properties rent-free in exchange for their official duties. An additional 21 royal post-holders, including 17 military knights, also reside in palace accommodation without charge.
Criticism and calls for transparency
Former Home Office minister Norman Baker criticised the arrangements, calling it "outrageous to subsidise luxury accommodation" for non-working royals. He argued that such practices should no longer be sustainable, stating that "deference is wearing thin indeed."
"Now, is it appropriate for non-working royals to be subsidised by the taxpayer from a fund that belongs to the taxpayer? The Crown Estate 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, former chairwoman of the Public Accounts Committee
Baroness Hodge expressed shock that the NAO could not determine how much Mountbatten-Windsor earned from sub-letting properties. She described the subsidisation of non-working royals as "worrying" and questioned the accountability of such arrangements.
Palace and Crown Estate respond
A Buckingham Palace spokesman stated that the report aligned with the Royal Household's commitment to transparency, adding that the findings would "help correct, clarify or contextualise a number of points regarding royal properties." The spokesman emphasised that property arrangements vary based on factors such as location, tenants, and purpose to ensure residences are used appropriately.
A Crown Estate spokesperson welcomed the NAO's review, confirming that leases with royal family members were agreed in line with independent, professional advice and open market valuations.
NAO director Lee Summerfield clarified that the report aimed to present facts without making judgements on value for money, providing information for MPs on the public accounts committee ahead of their inquiry.
