Andrew Mountbatten-Windsor received rental income from three cottages on the Royal Lodge estate while holding a long lease on the property, a new report by the National Audit Office has revealed.
The public spending watchdog said the cottages were part of the wider Royal Lodge estate, which is owned by the Crown Estate. Andrew was allowed under his lease to sub-let three of the nearby properties and did so until April 2026.
The report did not state how much money he received from the arrangement. Palace sources said the cottages were rented to staff or retired staff and that the income was used to cover running costs. The money, however, went to Andrew rather than to the Crown Estate, whose profits are normally paid to the Treasury.
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The NAO report is the first major review of royal residences in two decades. It was triggered by wider scrutiny of Andrew’s housing arrangements and is expected to be examined by MPs on the Public Accounts Committee.
According to the report, Andrew and his family or staff had access to 12 properties owned either by the Crown Estate or managed through the Royal Household. These included the main Royal Lodge residence, eight nearby properties and another property known as East Lodge, which had previously been reported as due to return to the Crown Estate.
Andrew left Royal Lodge earlier this year and moved to Sandringham in Norfolk. However, the report states that he still holds the lease on Royal Lodge until October 2026.
The watchdog also disclosed that Princess Beatrice and Princess Eugenie, Andrew’s daughters, have accommodation in royal palaces despite not being working members of the Royal Family.
Princess Eugenie has a property at Kensington Palace, while Princess Beatrice has one at St James’s Palace. Their rent is paid by the Privy Purse, which is the monarch’s private income, to the Royal Household. Both palaces are maintained through the Sovereign Grant, which is funded by public money.
The report did not reveal the exact rent paid for the princesses’ accommodation, but the rate is understood to be 60% of the open market value. A Palace source said the rent paid for non-working royals covers any public spending on the properties, meaning there is no additional cost to taxpayers.
Even so, the arrangement is likely to raise questions at a time when many young people are facing high rents and difficulty buying homes. Critics say subsidised accommodation for non-working royals could damage public confidence in the monarchy.
Norman Baker, a former Home Office minister and long-time critic of royal finances, described the arrangement as unacceptable. He said the public should not be expected to support luxury accommodation for people who do not carry out official royal duties.
Baroness Margaret Hodge, a former chair of the Public Accounts Committee, also criticised the lack of clarity over the income Andrew received from the sub-let cottages. She said it was worrying that the watchdog could not establish the amount and questioned whether non-working royals should benefit from arrangements linked to public assets.
The report also revealed that Princess Michael of Kent, another non-working royal, has accommodation at Kensington Palace, with rent also paid from the Privy Purse.
Eleven working royals are provided with accommodation in royal palaces without charge because they carry out official duties. They include the King and Queen, the Princess Royal, the Duke and Duchess of Edinburgh, the Duke and Duchess of Gloucester, the Duke of Kent, Princess Alexandra and the Prince and Princess of Wales.
The Prince and Princess of Wales also have an apartment at Kensington Palace, in addition to their Crown Estate home. The report said the Crown Estate spent almost £400,000 on repairs before the couple moved into Forest Lodge in Windsor.
The NAO also found that 21 other royal post-holders, including 17 military knights, have accommodation without charge in occupied royal palaces.
The report did not accuse Andrew or any member of the Royal Family of unlawful conduct. It also did not make a judgement on value for money. Instead, the NAO said its role was to set out the facts about how royal residences are managed by the Crown Estate and the Royal Household.
A Buckingham Palace spokesman welcomed the report and said it reflected the Royal Household’s commitment to transparency. The spokesman said the findings would help explain and clarify how royal properties are used, adding that arrangements vary depending on the location, tenant and purpose of each residence.
The Crown Estate also welcomed the review, saying its leases with members of the Royal Family were agreed in line with independent professional advice and open market valuations.
Despite those responses, the report is likely to keep pressure on the Palace. The disclosure that Andrew received rental income from cottages connected to Royal Lodge, while non-working royals had palace accommodation funded through royal private income, will add to calls for closer scrutiny of royal housing and public funding.
