Princess Beatrice and Princess Eugenie have not paid any rent for their palace residences for almost 20 years, according to a National Audit Office (NAO) report released this week. The audit also uncovered a series of other low‑cost or free royal housing arrangements, prompting criticism from MPs and royal watchdogs.

Princess Beatrice and Eugenie's rent‑free palace stays since 2008

The NAO found that both sisters have lived in Crown Estate‑owned apartments without paying a penny, with the costs covered by the Privy Purse – the king’s private income from the Duchy of Lancaster.. The report notes that the York sisters occupied St James’s Palace from 2008, and Eugenie moved to Ivy Cottage in Kensington Palace grounds in 2018, while Beatrice remains at the same location with her husband Edo Mapelli Mozzi.

Both properties are maintained with public funds via the Sovereign Grant, meaning taxpayers indirectly support the upkeep of the buildings even though the rent is technically covered by the royal household’s private cash.

Andrew Mountbatten‑Windsor’s Royal Lodge sublet controversy

Another focal point of the NAO review was the former Earl of Suffolk, Prince Andrew’s son, who was allowed to let three cottages on the Royal Lodge estate to staff and potentially pocket the surplus . The audit also flagged a possible £300,000 compensation claim from the Crown Estate after he was evicted over his association with Jeffrey Epstein.

Sources told the NAO that any income from subletting was intended to cover maintenance costs , not to generate profit, but the figures were not disclosed, leaving the claim unverifiable.

Cousins Prince Michael and Princess Alexandra’s long‑term Kensington deals

The report highlighted that Prince Michael of Kent and Princess Michael of Kent have enjoyed a subsidised lease on a lavish Kensington Palace apartment for decades, while Princess Alexandra, 89, rents a mansion in Richmond Park under a lease that runs until 2144 – when she would be 207 years old.

These arrangements, like those for Beatrice and Eugenie, were set up during Queen Elizabeth II’s reign and have been continued by King Charles, who affirmed that the agreements are under regular review.

Unanswered: Who ultimately bears the cost of under‑market rents?

While the NAO report states no direct taxpayer money went to the sisters, the Sovereign Grant finances the maintenance of the occupied palaces, effectively shifting the burden to the public purse. Critics such as former Liberal Democrat minister Norman Baker called the practice “outrageous” and urged Parliament to scrutinise the value for money.

Key questions remain : How many other royal residences are leased at below‑market rates, and what mechanisms exist to ensure transparent accounting of these privileged deals?