NAO Report Examines Royal Family Leases and Subletting Arrangements

The National Audit Office has published a review of leases granted by the Crown Estate to members of the royal family, including arrangements for Prince Andrew, known formally as Andrew Mountbatten-Windsor. According to the report, Andrew Mountbatten-Windsor sublet three cottages on the Royal Lodge estate while paying a peppercorn rent on the main 30-room mansion.

All tenants had vacated the cottages by April 2026. The NAO states he spent an estimated £5 million on refurbishment work instead of paying rent. The work was completed within two years.

” It states he could attempt to claim between £300,000 and £488,000 for the early surrender assuming a surrender date of 30 October 2026, depending on the condition of the property. The Crown Estate has previously said he is likely to receive nothing once dilapidations are taken into account.

He is the only royal with such a clause.

Andrew Mountbatten-Windsor was instructed to leave Royal Lodge in October 2025. He moved to Wood Farm on King Charles’s privately owned Sandringham Estate in February 2026. Staff Lodge 2 at Sunninghill Park remains occupied by an employee under a lease running to July 2027. An early surrender of that lease is currently being negotiated.

The NAO report also examined other royal residences. Prince William and Princess Kate moved into Forest Lodge on the Windsor estate in July 2025. The Crown Estate funded £396,993 of repairs at Forest Lodge, two of three cottages, a barn and the grounds before their arrival.

They pay a yearly rent of £307,200 on a 20-year lease with quarterly payments of £76,800 and no upfront deposit because they are covering all internal refurbishment costs. Their rent is reviewed every five years with increases of between 3 and 5 per cent in line with the Consumer Price Index.

If they remain for 22 years they would pay £6,758,400 in rent. They retain a rent-free apartment at Kensington Palace in return for royal duties.

The Duke and Duchess of Edinburgh pay a peppercorn rent for Bagshot Park and collected private income by renting out its stables to a third party until 2020. The Prince and Princess Michael of Kent have their rent paid by King Charles. Princesses Beatrice and Eugenie have their rents covered by the privy purse at rates between 50 and 68 per cent of market value.

Princess Eugenie’s rent is currently 64 per cent of the 2026 open market valuation. Princess Michael of Kent’s rent increased 34 per cent between 2020 and 2026 to reach 63 per cent of this year’s market valuation. No valuation of her property had been done before 2026.

Rents paid by the privy purse are generally set at around 60 per cent of open market rate.

A spokesperson for The Crown Estate said: “The Crown Estate welcomes the National Audit Office’s review which confirms its leases with members of the royal family were agreed in line with independent, professional advice and open market valuations.” A spokesperson for Buckingham Palace said the report was “in line with The Royal Household’s commitment to transparency” and they hope the findings will “help correct, clarify or contextualise a number of points regarding Royal properties.”

The findings will be presented to MPs on the public accounts committee as part of a wider inquiry into royal residences expected later in 2026.