A government audit of royal property arrangements has intensified scrutiny of King Charles, Princess Beatrice, Princess Eugenie and Prince Andrew after investigators detailed how non-working royals continue to benefit from subsidized housing while Andrew received income from cottages linked to his Windsor estate.
The findings emerged in a 56-page report by the National Audit Office (NAO), which spent months examining how royal residences are allocated, valued and financed. The review was ordered amid growing political pressure over long-standing arrangements involving Royal Lodge and other Crown-linked properties.
At the center of the report is an arrangement under which King Charles pays housing costs for Princess Beatrice, Princess Eugenie and Prince and Princess Michael of Kent through income generated by the Duchy of Lancaster. The payments are made through the Privy Purse and ultimately support residences occupied by family members who do not carry out official royal duties.
According to the NAO, the apartments occupied by Beatrice and Eugenie have historically been rented at reduced rates tied to percentages of market value rather than full commercial rents. The watchdog said valuation methods were not always updated consistently.
The report found that rental calculations for some properties relied on outdated market assessments for years. Eugenie's three-bedroom Ivy Cottage residence at Kensington Palace was reportedly based on a 2018 valuation until recently, while Beatrice's apartment at St. James's Palace relied on a 2020 assessment.
The NAO said updated 2026 valuations now place the properties at:
- 64% of market rent for Eugenie's residence
- 68% of market rent for Beatrice's residence
- 63% of market rent for the Kensington Palace apartment occupied by Prince and Princess Michael of Kent
The exact amounts paid remain undisclosed.
The findings have generated criticism because neither Beatrice nor Eugenie primarily lives in the London properties. Beatrice resides largely in Oxfordshire with her husband, Edoardo Mapelli Mozzi, while Eugenie spends much of her time in Portugal with her husband, Jack Brooksbank.
The report's most politically sensitive findings, however, involve Prince Andrew. The NAO found that Andrew was permitted under his long-term Royal Lodge lease to sublet three cottages located on the estate. Rental income from those properties was paid directly to Andrew rather than to the Crown Estate.
Investigators said they were unable to determine how much revenue was generated because rental figures, occupancy records and profitability data were not available. The arrangement reportedly ended in April 2026.
Former Liberal Democrat minister Norman Baker sharply criticized the arrangement.
"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," Baker said.
"The money should have gone to the Crown Estate, not into [his] pockets."
Baker also questioned broader financial support provided to non-working members of the royal family.
"Non-working members of the royal family should [not] be subsidised by the Duchy of Lancaster," he said.
The audit also revealed the scale of the York family's historic property footprint. According to the NAO, Andrew and his immediate family controlled or occupied as many as 12 royal residences through leases or rental arrangements before recent changes.
Andrew surrendered Royal Lodge in October 2025 and gave up East Lodge earlier this year. The report notes that while he could theoretically be entitled to compensation worth up to £488,000 for the early surrender of Royal Lodge, any payment would likely be offset by repair and maintenance obligations tied to the property.
The NAO also revisited the housing arrangements of Prince and Princess Michael of Kent. Buckingham Palace previously indicated the couple would transition to commercial rent arrangements after controversy over a heavily discounted lease. The audit found their rent is currently being paid through the King's Privy Purse, though the exact amount remains confidential.
Elsewhere, the report outlined different arrangements for working royals. Prince William and Catherine, Princess of Wales, pay £307,200 annually under a 20-year lease at Forest Lodge near Windsor. The Crown Estate funded approximately £400,000 in essential property works, while the couple financed interior improvements.
