National Audit Office: Royal Family property arrangements vary according to requirements and provider

• Seven members of the Royal Family occupy five properties leased from The Crown Estate – the lease terms vary, reflecting factors including upfront premium payments, refurbishment costs and early surrender clauses. 
• The Royal Household provides eleven working members of the Royal Family with seven residences within the occupied royal palaces at no cost in exchange for their official duties. 
• Three properties in the occupied royal palaces are rented to non-working Royals – the Household's policy is to charge an adjusted rent of typically 60% of the open market value. These three rents are currently paid by the Privy Purse.

The rent and lease arrangements for members of the Royal Family differ depending on why the accommodation is required and whether the property is managed by The Crown Estate (TCE) or The Royal Household (the Household), according to a new National Audit Office (NAO) report.^1,2,3

Seven members of the Royal Family occupy five properties leased from TCE. Of these, three properties are leased under the names of individual Royals, one is leased to a company, and the other is co-leased to a Royal and a trust. Two additional properties are leased to members of the Royal Family for use by their staff.⁴

TCE has established processes for agreeing leases,⁵ which include seeking independent valuation advice. It uses this information to negotiate final lease terms, which vary depending on the circumstances of each individual property and market conditions.

The differences in lease terms include the value of upfront premium payments; subletting rights; the assignability of leases; refurbishment and renovation costs; and early surrender clauses.⁶

The leases on Royal Lodge, Bagshot Park and Thatched House Lodge have sub-letting provisions. In the case of Royal Lodge, three cottages on the estate were sublet with income generated payable to Andrew Mountbatten-Windsor. These properties have been vacant since April 2026.

The Royal Lodge lease has an early surrender clause and possible compensation. This means Andrew Mountbatten-Windsor, who requested early surrender of the property's lease on 30 October 2025, could be entitled to compensation payment of £301,967.66, assuming the full 12-month notice period is served and depending on dilapidation costs at handover which, at the time of publication, had not yet been assessed.⁷

The Household, which manages the land and buildings in the occupied royal palaces,⁸ has policies setting out the amount of rent payable for use of space and facilities within the estate. In 2024-25, it generated £3.6 million in rental income by charging for non-official use of residential properties.

The rent due depends on factors including the tenant's role within the Royal Family or Household, whether the accommodation is required for official duties, and whether it is within a secure location.

Eleven members of the Royal Family have seven residences within St James's Palace and Kensington Palace and use these at no cost in exchange for carrying out official duties.⁹

Three properties in the occupied royal palaces are rented to non-working members of the Royal Family.¹⁰ In these instances, Household policy is to charge an adjusted rent of typically 60% of the open market value.¹¹ However, this policy has not always been strictly followed.¹² These three rents are currently paid by the Privy Purse.¹³

The Household also generates income from a further 145 properties used by its staff, who are required to live within occupied royal palaces and contribute a proportion of their salaries towards accommodation costs. In 2025-26, this was 16.7% of gross pensionable salary.

The Monarch is permitted to move properties between TCE and the Household through three legislative acts, often referred to as ‘grace and favour' arrangements.¹⁴ Contrary to the commonly held definition, these properties are not provided free of charge to those occupying them. Instead, charges for occupying these properties vary depending on several factors, including who the tenant is and the role they perform.

Currently, the Household manages 52 ‘grace and favour' properties that were previously part of TCE – typically flats and cottages located in Windsor used by Household staff and pensioners.¹⁵

ENDS
Notes to editors

1. The report was commissioned in response to the Public Accounts Committee launching an inquiry into property arrangements provided to members of the Royal Family following correspondence with TCE, primarily related to Royal Lodge. The NAO's 2005 report on residential property leases between TCE and members of the Royal Family can be accessed here: The Crown Estate – Property Leases with the Royal Family
2. TCE and the Household provide accommodation for members of the Royal Family. They serve different objectives with distinct roles when carrying out this function, reflecting the fact that TCE has a commercial mandate compared to the Household's narrower focus on supporting Royal duties. See Paragraph 2 and Figure 3 in the report for further information on the respective roles and responsibilities of TCE and the Household.
3. See Figure 2 in the report for further information on TCE's residential leases with members of the Royal Family as at May 2026.
4. Both TCE and the Household have framework agreements in place with HM Treasury (HMT), their sponsor department, to define roles, responsibilities and accountabilities. A key difference is that TCE, as a self-funding public corporation, is not subject to spending controls or funding from government. In contrast, HMT is responsible for issuing and monitoring the Household's spending of the Sovereign Grant. Both operate in accordance with the principles of Managing Public Money, guidance set by HMT to ensure public funds are used responsibly and effectively.
5. See paragraph 10 in the report for further information on the differences in terms.
6. In February 2026, Andrew Mountbatten-Windsor also contacted TCE to request early surrender of the lease of Staff Lodge. As of 31 May 2026, the tenant, an employee, remained in the property with a tenancy end date of July 2027.
7. See paragraph 3.2 in report for a full list of the occupied royal palaces estate.
8. The eleven members of the Royal Family are: The King and Queen, The Prince and Princess of Wales, The Duke and Duchess of Gloucester, The Duke of Kent, The Princess Royal, The Duke and Duchess of Edinburgh, and Princess Alexandra.
9. The non-working members of the Royal Family are Princess Beatrice, Princess Eugenie, and The Prince and Princess Michael of Kent.
10. The Household charges non-working members of the Royal Family an adjusted rate due to the properties being located within a secure cordoned area, limiting who can reside there as tenants require security clearance or vetting.
11. Between 2020 and 2021, Princess Eugenie's rent was set at 50% of the 2018 market value, increasing to 55% in 2022, 60% in 2023, 63% in 2024 and 64% in 2026. Princess Beatrice's rent was paid at 60% of the 2020 market value in 2020 and 2021, and increased to 68% by 2026. No valuations were available prior to 2026 for the accommodation rented by The Prince and Princess Michael of Kent. Rent has increased 34% between 2020 and 2026, and is now 63% of the 2026 open market valuation. It is not clear on what basis the rental costs increased during these periods as the property valuations were not updated and therefore did not change.
12. The Privy Purse is the private finances and estates of the Sovereign. It receives income from the Duchy of Lancaster and funds official expenditure incurred by other members of the Royal Family who perform official duties that is not met by the Sovereign Grant, at the discretion of the Sovereign.
13. See paragraphs 1.19 to 1.23 and Figure 4 for further information on the Acts of legislation underpinning the ‘grace and favour' arrangements.
14. In the past 30 years, there have been no requests from the Monarch for the transfer of properties from TCE to the Household. Between 1992 and 2024, the Monarch returned 28 properties to TCE, and the Household and TCE are in early discussions about the return of more properties.