‘Outrageous’: Andrew made ‘potentially millions’ from subletting royal properties

REVELATIONS that Andrew Mountbatten-Windsor could have made “potentially millions” from subletting properties on the Royal Lodge estate have been branded “outrageous”.

The disgraced former royal received the payments while paying a peppercorn rent on the property on the Windsor estate for more than two decades, an investigation has shown.

The National Audit Office (NAO) has published a report into the royal family’s residential property arrangements after controversy surrounding the disgraced former duke’s lease of the Crown Estate home.

Other findings by the public spending watchdog include the revelation that the King foots the bill for Princess Beatrice and Princess Eugenie’s accommodation in royal palaces despite both Andrew’s daughters being non-working royals.

And for a number of years, their adjusted rents – reduced because the Royal Household properties require tenants with security clearance – were based on out-of-date open market valuations.

Former LibDem minister Norman Baker branded the arrangements “outrageous”.

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“The whole thing is outrageous. If you look at Andrew, this is adding insult to injury,” he said.

“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.

“The money should have gone to the Crown Estate, not into (his) pockets.”

He added of Beatrice and Eugenie: “There’s no way that non-working members of the royal family should be subsidised by the Duchy of Lancaster.

“The royal family is yet again taking the public for a complete ride.”

Sources suggested to the Press Association that Andrew’s subletting did not generate a profit and that the rent was set at a rate to only cover maintenance and running costs for staff living there.

But no figures, such as repair and household costs versus rental income, or copies of the rental agreements, have been made public.

Police officers at Royal Lodge, the former home of Andrew Mountbatten-Windsor in Windsor, Berkshire. (Image: Jonathan Brady)

The NAO report stated: “Three cottages on the Royal Lodge estate were also sublet with income generated from subletting payable to Andrew Mountbatten-Windsor.”

Up until this year, Eugenie’s rent of Ivy Cottage in Kensington Palace was based on a 2018 valuation and Beatrice’s apartment in St James’s Palace on a 2020 valuation.

Eugenie’s rent was 50% of the 2018 open market value from 2020 to 2021, and ranged from 55% in 2022 to 63% in 2025, while rent on Beatrice’s was 60% of the 2020 market value from 2020-2021 and ranged from 62% to 68% between 2022-2025, the NAO said.

The current rental rates are now 64% of a 2026 open market valuation for Eugenie, and 68% of a 2026 valuation for Beatrice.

But both rents are paid to the Royal Household entirely by the King out of the Privy Purse.

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The King’s nieces Eugenie, 36, and Beatrice, 37, are non-working royals who both have jobs, with Beatrice married to a multimillionaire property developer.

The princesses faced scrutiny when their names appeared in the recent Jeffrey Epstein files, with one email exchange suggesting their mother Sarah Ferguson took them to see the convicted paedophile in the US days after he was released from prison for child sex crimes.

Andrew was entitled to sublet up to three properties on the Royal Lodge estate in Windsor Great Park under the terms of his lease.

No details of how much he earned through subletting – an amount that is not returnable to the Crown Estate – or how much the King pays for Eugenie and Beatrice’s rent were released by the NAO, with the watchdog saying the amounts were private.

Balmoral, the royal estate in Aberdeenshire, was not examined in the report as it is considered private property.

Sarah, Duchess of York and her daughters Princess Beatrice and Princess Eugenie (Image: Aaron Chown/PA Wire)

Andrew, who was arrested on suspicion of public misconduct in February, was not asked to provide the information.

It is also not known whether Andrew’s sublet properties were consistently rented out, but his subletting of the residences ended in April 2026.

He finally quit Royal Lodge earlier this year, moving to the King’s private Sandringham estate in Norfolk.

It has been widely reported that Andrew may not receive the compensation he is due for giving up his lease, which would be a payout of between £301,967 and £488,342, depending on the condition of the property and the date the lease is officially surrendered.

But the amount he will receive, if any, is still not known because the Crown Estate is waiting to assess the final state of the property.

The NAO described Andrew’s lease agreement as the only one with an early surrender clause in the sample it examined.

He retains the lease until October this year. It was negotiated in 2003 on the basis he would spend £7.5 million renovating the property, which the Crown Estate confirmed he did.

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This reduced his capital premium payment to £1m, alongside a peppercorn rent.

The then-York family had a total collection of 12 properties within the Crown Estate and the Royal Household in 2025.

Leased from the Crown Estate, Andrew had Royal Lodge which consists of the mansion plus eight properties known as the Main Gate Cottages, three of which could be sublet; plus a lease of Staff Lodge 2 – known as East Lodge – at his former marital home Sunninghill Park for a staff member, which he requested to surrender in February.

Beatrice’s St James’s Palace apartment and Eugenie’s Ivy Cottage home are Royal Household properties within the occupied royal palaces.

The report, which did not assess value for money, will form the basis of the Public Accounts Committee’s inquiry into royal properties.