Andrew made money subletting cottages on his almost rent-free estate, watchdog finds

Former prince Andrew earned an undisclosed rental income from subletting three cottages while paying virtually no rent himself, according to a watchdog report that has shed new light on the royal family’s property arrangements.

It is the first major review of royal property leases in two decades by Britain’s National Audit Office (NAO), which examined how members of the royal family use Crown Estate and royal household properties.

The report found King Charles’s younger brother — now known as Andrew Mountbatten-Windsor after being stripped of his royal titles — held leases on 10 royal properties, including the Royal Lodge on the 40-hectare Windsor estate.

While Andrew was living in the 30-room mansion under a lease that required only a symbolic “peppercorn rent”, the NAO found income from the nearby cottages was paid directly to him.

“Three cottages on the Royal Lodge estate were … sublet with income generated from subletting payable to Andrew Mountbatten-Windsor,” the report said.

The cottages remained occupied until April this year.

Released on Friday, the watchdog’s report came ahead of a parliamentary inquiry into royal property leases later this year.

According to the NAO, Andrew secured a 75-year lease on Royal Lodge in 2003 after paying a 1 million British pounds ($1.9 million) “premium” and agreeing to spend 7.5 million pounds ($14.1 million) on improvements to the property.

In return, the report said he paid only a “peppercorn rent”, which is a legal term for a token payment that effectively amounts to no rent at all.

The former prince moved out of Royal Lodge earlier this year and relocated to King Charles’s private Sandringham estate after years of pressure from the monarch to leave the property.

Andrew’s ex-wife, Sarah Ferguson, also lived at Royal Lodge before the pair left the property.

Andrew, the second son of the late Queen Elizabeth II, was briefly arrested in February amid fresh scrutiny over his ties to the late convicted sex offender Jeffrey Epstein. 

Police also searched Royal Lodge as part of an ongoing investigation into his suspected misconduct in public office. Andrew has repeatedly denied any wrongdoing.

Under the terms of his lease, the watchdog said Andrew was entitled to seek compensation for ending the agreement early.

By moving out this year, the arrangement could have resulted in a payout of more than 300,000 pounds ($566,000).

However, he is unlikely to receive any compensation because of the property’s condition and the cost of outstanding repairs, according to the Crown Estate.

This self-funding public corporation, which manages royal properties, is required to follow finance ministry guidelines on effective use of public funds.

In response to the report’s findings, a spokesperson for the Crown Estate said leases with members of the royal family were “in line with independent, professional advice and open market valuations”.

“We hope that the findings will help correct, clarify or contextualise a number of points regarding royal properties,” a Buckingham Palace spokesperson added.

King funds palace homes for Andrew’s daughters

The review also shed light on housing arrangements for Andrew’s daughters, revealing the king pays for accommodation occupied by Princess Beatrice and Princess Eugenie despite neither being a working royal.

Beatrice lives in accommodation at St James’s Palace, while Eugenie lives at Ivy Cottage within Kensington Palace.

Their rents are paid through the Privy Purse, which is funded by the king’s private income, although the report does not specify how much is paid.

The report found non-working members of the royal family who live in palace accommodation are typically charged rent equivalent to about 60 per cent of market value, although the NAO said the policy had “not always been strictly followed”.

Both women have largely kept a low public profile since their father’s arrest earlier this year, with royal experts saying the king would likely shield his nieces from the fallout.

The NAO found 11 working members of the royal family live rent-free in seven palace residences as part of their official duties, while three palace properties are occupied by non-working royals on separate rental arrangements. Another 145 properties house palace staff.

The royal household generated 3.6 million pounds ($6.8 million) in rental income last financial year from residential properties used for non-official purposes, the report said.

According to the report, Prince William pays more than 300,000 pounds ($566,000) a year in rent for Forest Lodge on the Windsor estate. Before he and Catherine moved in, the Crown Estate spent almost 400,000 pounds on repairs to the property.

The watchdog’s investigation was launched after parliament’s Public Accounts Committee questioned whether royal property arrangements represented value for money.

While the NAO stopped short of assessing whether taxpayers receive value from the arrangements, the review provides one of the most detailed examinations in years of how members of the royal family benefit from a network of Crown Estate and royal household properties.

ABC/wires