Crown Estate Faces Scrutiny Over Royal Property Leases
Public Accounts Committee flags rising costs and inconsistent rent valuations for non-working royals, urging commercial practice reforms.
Sarah Connor
The Public Accounts Committee has issued recommendations following an inquiry into Crown Estate properties.
An investigation exposed Prince Andrew's undisclosed income from subletting three cottages on the Royal Lodge estate, a Crown Estate property. He paid a peppercorn rent for over two decades while collecting these funds.
King Charles paid a £1.5 million repair bill for dilapidations at Royal Lodge on behalf of Andrew Mountbatten-Windsor. This followed a payment of about £300,000 due to him for surrendering his lease.
Rent figures for these sublet cottages reflected a percentage of salary, falling below market rates. Leases on Bagshot Park and Thatched House Lodge also permit subletting.
The Royal Household oversees 255 residential properties across occupied royal palaces. Prior to this year, outdated property valuations led to inconsistencies in rent charged for non-working royals.
Princess Eugenie's rent for Ivy Cottage at Kensington Palace relied on a 2018 valuation. Princess Beatrice's apartment in St James's Palace used a 2020 valuation.
The National Audit Office claims outdated residential property valuations caused inconsistencies in the rent charged for non-working members of the Royal family within occupied royal palaces.
The Public Accounts Committee (PAC) report states the Crown Estate must by law 'achieve the best price' it can from renting out its properties. However, their rent is meant to be set at 60 per cent of market rate, a policy not enforced over many years.
We recommend that for all future leases the Crown Estate adopt a normal commercial practice to sub-letting. There should be a standard provision in leases that prohibits sub-letting, unless the landlord’s prior permission is obtained.
The committee further recommended, "That permission should not be unreasonably withheld, and we would expect the Crown Estate to obtain relevant financial details." A Crown Estate spokesperson acknowledged, "The PAC report is an important part of our accountability to Parliament."
The Crown Estate spokesperson confirmed, "We are considering its findings and recommendations and will respond to the Committee in due course." The Public Accounts Committee claims the Crown Estate did not identify specific lessons from the Royal Lodge lease arrangement.
The Crown Estate was reluctant to discuss specifics on how it applies lessons learned from this process or what it will do differently in the future, citing the Royal Lodge lease as a product of its time. The committee also claims the Crown Estate's evidence offered limited insight on how it balances financial objectives with environmental and social ones.