'We have a right to know': The palatial homes with peppercorn rents posing problems for the royal family

By Melissa Twigg

Andrew Mountbatten-Windsor certainly has the reverse Midas touch. With each new revelation about his behaviour, his finances and his friendships, the King's younger brother tugs at another thread of the royal tapestry – and threatens to unravel it.

Now, the spotlight has turned on the family properties. Earlier this autumn, it was revealed that Andrew paid a peppercorn rent for his palatial house on the Windsor Estate.

Andrew Mountbatton Windor has pulled the spotlight onto the royal family's properties - and rent.

The erstwhile prince has since surrendered his lease on Royal Lodge (and is expected to move to Sandringham early next year) – but the debacle alerted the British public to the fact that certain members of the family pay a vastly reduced rate on houses and apartments owned by the Crown Estate, a property business owned by the monarch, but run independently.

The body manages assets that are hereditary possessions of the Sovereign held "in right of the Crown", and the profits it generates are surrendered to the Treasury in exchange for an annual subsidy which funds the public work carried out by the Royal family. It is thought to have hundreds of properties in its portfolio.

"The Crown Estate contains a huge number of properties but most of us haven't been aware of what exactly is out there, and until now, few of us have cared to ask," says Ingrid Seward, royal biographer and editor-in-chief of Majesty magazine.

"Now, that has changed, which means Andrew has opened the door to a lot of problems for his family and the way they live."

Andrew was paying

This week, Parliament's public accounts committee announced plans to investigate the terms under which members of the family occupy properties owned by the Crown Estate, with an inquiry set for early 2026.

But questions are already being asked about the likes of Bagshot Park – the Duke and Duchess of Edinburgh's resplendent 120-room Surrey mansion that comes with 50 acres of land.

The couple moved there in 1999 (initially paying £5,000 a year in rent), and renewed their lease with a one-off payment of £5m to the Crown Estate in 2007. Their agreement states they are entitled to stay there for 150 years.

If Edward and Sophie were to leave the house tomorrow, they would have paid around £250,000 a year to live there. However, if they stay put for another 20 years, that would go down to £125,000 a year, or little over £10,000 a month.

The Duke and Duchess of Edinburgh pay peppercorn rent on Bagshot Park in Surrey.

The mansion comes with 50 acres of land.

This is well below market value, and with each passing year, their "rent" becomes cheaper. Considering there was once a bid to turn the mansion into a conference centre (properties that size can make a profit of around £12m a year for commercial ventures), these sums represent a significant loss for the public purse.

Hence former Liberal Democrat MP and Home Office minister Norman Baker arguing in a recent editorial that any failure by the Crown Estate to maximise rents from its portfolio of properties "represents less money for the public purse, and so an indirect public subsidy to rich members of the royal family."

Not everyone agrees, and particularly when it comes to diligent royals like Edward and Sophie who receive no salary for the work they do. "All they get is travel that they may not even want and some money for clothes when they do go abroad – and then this hugely reduced rental," says Seward.

"The trouble with Royal Lodge was that Andrew was doing bugger all so it felt wrong, but in my opinion Sophie and Edward add a lot to this country and don't deserve the criticism."

Another property that has come under scrutiny is the home of Princess Alexandra (the Duke of Kent's sister) who lives in Thatched House Lodge in Richmond Park for a rent of just £225 a month, which works out at approximately £56 a week.

On the one hand, this is absurdly cheap for the capital, but on the other, Princess Alexandra is an 88-year-old woman who dedicated much of her life to attending charity events and openings on behalf of the Royal family.

"To be honest, I think the criticism is a little unfair," says royal correspondent and biographer Robert Jobson.

"She did a lot of work for the family and is now old and frail and not very well, and you can't go in and suddenly put the rent up. But when she dies, that would be the time to put it on at market prices. And that should be true even if another member of the family moves in: they need to pay a commercial rate."

Princess Alexandra pictured with husband Angus Ogilvy and son James at Thatched House Lodge in 1968.

Some already do. King Charles reportedly has to pay Prince William (who now owns the Duchy of Cornwall) a six-figure annual sum to lease Highgrove from the Duchy, while William famously insists on paying a market-value rent for Forest Lodge, his family's new "forever home" and one which is said to cost him upwards of £15,000 a month.

Still, even William – who is a stickler for doing things fairly – is unlikely to pay the going rate for his four-storey, 20-room apartment in Kensington Palace.

Alongside him in the grounds of the west London property are the Gloucesters, who live in the Old Stables, and the Duke of Kent, who is based in Wren House, and Prince and Princess Michael of Kent, who have an apartment of their own. Princess Eugenie, meanwhile, lives between Ivy Cottage – which also sits within the grounds of Kensington Palace – and Portugal, with her husband and two sons.

And then there is St James's Palace which houses Princess Anne (when she is not at her main private estate in Gloucestershire), Princess Beatrice, and Princess Alexandra in large apartments near Pall Mall – with Beatrice's flat rumoured to be so large that it even contains a ballroom.

Prince William insists on paying market-vale rent on his family's new property, Forest Lodge.

(One palace insider notes that Andrew was allegedly paying the London rent on behalf of his daughters for some time, but that this is likely to have stopped now.)

All in all, the situation is a complex one. Anyone living in these palaces rubs shoulders with senior royals on a daily basis, which makes renting them out to members of the public extremely difficult.

"If they weren't given to family, they would be empty," says Seward.

"In fact, putting them on the market would be a burden to the taxpayer because of all the police who would have to be around, keeping tabs on everyone."

Still, the system could do with reform or, at the least, some transparency.

"I'm not questioning their right to have somewhere to live in London," says Jobson, "but we do have a right to know what they are paying, particularly in the case of people like Eugenie and Beatrice who are not working royals. There are a lot of young people living in London who would dream of renting a single room within a few miles of where they [the princesses] live, let alone a huge apartment."

In all likelihood, we will have to wait until William's reign for a major overhaul, whatever that looks like.

"When Charles first became King, he wanted to reevaluate how it was all working but I think the cancer stopped him in his tracks," says Jobson.

"He was hoping to limit the number of people having access to Crown Estate properties – or stopping situations where, say, an adult son or daughter was living in an apartment allocated to their parents. But I suspect all that will be left to William."

Equally, Britain needs to work out what exactly it wants from the Crown Estate. Is it there to supply properties for the Royal family to live in and for the public to visit, or is its main objective to make the most profit possible?

"If they are going to run the Crown Estate as a business, then they could rent all these palaces out to oligarchs, but that certainly wasn't the original purpose of it," says Jobson.

Some of these questions will need to be addressed sooner rather than later. The Crown Estate said this week that one possible option for Royal Lodge is to put it on the market, although a tenant would need to be chosen very carefully as they would be sharing an estate with the future king.

Frogmore Cottage, which was renovated by former residents Harry and Meghan, and Adelaide Cottage – William and Kate's former home – could also get the same treatment.

Interestingly, there is some precedent for this, as Fort Belvedere in Windsor Great Park has been rented out privately since the 1980s to the late Galen Weston, a British-Canadian billionaire whose family still lives there.

Still, we should perhaps be wary of being too zealous, and remember that so much of what makes the monarchy powerful is the pomp and ceremony – and that this is linked to the fact they are going home in their carriages to palatial residences rather than ordinary terraced houses.

"There is a malaise in Britain at the moment," says Seward.

"People feel like it is too expensive to live in this country and at times like that they tend to turn on the monarchy, but what they don't realise is how hard some of them work and how joyless much of their lives really are. The least we can do is let them live somewhere lovely."