King Charles is paying the rent on grace-and-favour apartments for Princess Beatrice and Princess Eugenie in London palaces while their father, Andrew Mountbatten-Windsor, has quietly pocketed income from subletting cottages on his Windsor estate, according to a report published in London on Friday. The National Audit Office (NAO) said the king was meeting the York sisters' reduced rents from his private Duchy of Lancaster income, despite both women living elsewhere and neither being working royals.
The NAO has spent six months examining how royal residences are allocated and paid for after MPs ordered an inquiry into The Crown Estate and the furore over Andrew's long-standing deal at Royal Lodge in Windsor Great Park. The former Duke of York has lived there for more than 30 years on what is described as a peppercorn rent, a symbolically low payment that has increasingly jarred with his disgraced public standing.
King Charles and The Question of Princesses' Rent
The watchdog's 56-page report says King Charles pays the rent for three royal properties used by non-working family members: Princess Beatrice's and Princess Eugenie's apartments, plus the Kensington Palace home of Prince and Princess Michael of Kent.
The arrangement is understood to date back to Queen Elizabeth II and to have been carried on by her son. The money comes from the Privy Purse, funded by the Duchy of Lancaster, and is paid into the Royal Household, which supports the king and working royals.
Under Household rules, Beatrice, Eugenie and the Kents should be charged an adjusted rent of 60% of open-market value. But the NAO found that this benchmark was not applied consistently and that calculations often relied on outdated valuations.
Until this year, Eugenie's rent for Ivy Cottage, a three-bedroom property in Kensington Palace, was based on a 2018 valuation, while Beatrice's four-bedroom apartment at St. James's Palace used a 2020 figure. Eugenie's rent rose from 50% of open-market value in 2020 to 2021 to 63% in 2025, while Beatrice's moved from 60% to a range of 62 to 68% over the same period.
The NAO said current rates now reflect 2026 valuations, with Eugenie at 64% and Beatrice at 68%. The exact sums, and how much the king pays on their behalf, remain private.
The arrangement has drawn criticism because neither woman uses the flats as a main home. Beatrice, 37, lives in Oxfordshire with her husband Edoardo Mapelli Mozzi and their children, while Eugenie, 36, is based in Portugal with her husband Jack Brooksbank and their sons. Both cousins work and have no formal royal duties.
By contrast, their cousins Zara Tindall and Peter Phillips live on the privately owned Gatcombe Park estate and do not enjoy similar palace accommodation. Their mother, the princess royal, chose not to give them royal titles, keeping them at arm's length from Crown Estate largesse.
Andrew's Property Income
Andrew's property arrangements were among the report's most explosive findings. The former Duke of York, stripped of his prince title and dukedom by King Charles over his links to Jeffrey Epstein, was entitled under his 75-year Royal Lodge lease to sublet up to three cottages on the estate.
The NAO found that three cottages were indeed rented out, with the income paid to Andrew rather than The Crown Estate. The arrangement ended in April 2026. The watchdog said it does not know what rent was charged, how often the cottages were let or whether any profit was made once maintenance and staff costs were accounted for.
Former Liberal Democrat minister Norman Baker called the set-up 'outrageous' and accused the royals of 'taking the public for a complete ride.' 'It shows an absolute total contempt for the taxpayer, not only that Andrew was able to have a peppercorn rent for a gigantic property, but then to make potentially millions on the side from subletting properties,' he said. 'The money should have gone to the Crown Estate, not into [his] pockets.' He added that 'non-working members of the royal family should [not] be subsidised by the Duchy of Lancaster.'
WE ARE NOT ANGRY ENOUGH:
— 🇬🇧King 🇬🇧 (@King0243_PJC) June 5, 2026
Norman Baker says Andrew’s Royal Lodge deal was an “insult to injury”.
30-room mansion.
Peppercorn rent.
Income from subletting.
The Royal Family keeps asking for respect.
The question is: when will it start earning it? #AbolishTheMonarchy pic.twitter.com/5G8knB9qw4
The NAO said the York family controlled 12 royal residences through leases or rentals until earlier this year, including Royal Lodge and its eight cottages, East Lodge near Sunninghill Park, and Beatrice and Eugenie's palace apartments.
Andrew surrendered Royal Lodge in October 2025 and gave up East Lodge at the start of 2026. He may technically be due up to £488,000 in compensation for the early surrender, but that would be offset against dilapidation costs. Officials believe he is unlikely to receive a payout and may even owe money if repair bills are higher. He now lives at Marsh Farm on the King's Sandringham estate.
Other Royal Rentals
The NAO's focus is not limited to the Yorks. It also highlights the case of Prince and Princess Michael of Kent, who have lived in a Kensington Palace apartment since 1978. In 2002, they were found to be paying just £69 a week in peppercorn rent despite not being working royals, and by 2008 Buckingham Palace said they would move to a full commercial rent from 2010, with the Queen covering the interim £10,000-a-month bill.
So - it's paid for........
— dave lawrence 🐟🐟🐠 (@dave43law) June 5, 2026
Prince and Princess Michael of Kent have rent bill for palace home paid by King https://t.co/kW0lEkIzyZ
That promise now appears to have been reversed. The NAO says their rent is once again being paid from the King's Privy Purse rather than by the couple, with the figure now set at 63% of a 2026 open-market valuation. The exact sum remains undisclosed.
The report also sets out how other senior royals handle Crown Estate property. The Prince and Princess of Wales have a 20-year lease on Forest Lodge near Windsor, paying £307,200 a year in rent. They did not pay a deposit and instead funded internal renovations, while The Crown Estate spent £400,000 on essential works.
The Duke and Duchess of Edinburgh pay a peppercorn rent for Bagshot Park in Surrey under a 150-year lease agreed in 2007. The deal was backed by a £5 million payment and a previous restoration commitment of £1.38 million, and they also generated private income by renting out the stable complex until 2020.
Buckingham Palace said it was grateful for the report and hoped it would 'correct, clarify or contextualise' points about royal properties. The Crown Estate said its leases were agreed on the basis of independent professional advice and open-market valuations.
MPs on the Public Accounts Committee are expected to scrutinise those assurances closely.
