Andrew made money subletting cottages on his almost rent-free estate, watchdog finds

The UK watchdog says it does not know how much rent Andrew Mountbatten-Windsor charged for the cottages. (Reuters: Toby Melville/File Photo)

Former prince Andrew earned undisclosed rental income from three cottages on the Windsor estate while paying only a symbolic "peppercorn rent" for Royal Lodge, a watchdog report has found.

The review also revealed King Charles pays for accommodation occupied by Andrew's daughters, Princess Beatrice and Princess Eugenie, despite neither being a working royal.

The findings, published ahead of a parliamentary inquiry into royal property arrangements, offer one of the most detailed looks in decades at how members of the royal family benefit from Crown Estate and palace properties.

Former prince Andrew earned an undisclosed rental income from subletting three cottages while paying virtually no rent himself, according to a watchdog report that has shed new light on the royal family's property arrangements.

It is the first major review of royal property leases in two decades by Britain's National Audit Office (NAO), which examined how members of the royal family use Crown Estate and royal household properties.

The report found King Charles's younger brother — now known as Andrew Mountbatten-Windsor after being stripped of his royal titles — held leases on 10 royal properties, including the Royal Lodge on the 40-hectare Windsor estate.

A police officer passes the gate of the Royal Lodge in Windsor after Andrew Mountbatten-Windsor was arrested in February. (AP Photo: Alberto Pezzali)

While Andrew was living in the 30-room mansion under a lease that required only a symbolic "peppercorn rent", the NAO found income from the nearby cottages was paid directly to him.

"Three cottages on the Royal Lodge estate were … sublet with income generated from subletting payable to Andrew Mountbatten-Windsor," the report said.

Released on Friday, the watchdog's report came ahead of a parliamentary inquiry into royal property leases later this year.

According to the NAO, Andrew secured a 75-year lease on Royal Lodge in 2003 after paying a 1 million British pounds ($1.9 million) "premium" and agreeing to spend 7.5 million pounds ($14.1 million) on improvements to the property.

In return, the report said he paid only a "peppercorn rent", which is a legal term for a token payment that effectively amounts to no rent at all.

The former prince moved out of Royal Lodge earlier this year and relocated to King Charles's private Sandringham estate after years of pressure from the monarch to leave the property.

Andrew's ex-wife, Sarah Ferg