Prince and Princess Michael of Kent have rent bill for palace home paid by King

Non-working royals Prince and Princess Michael of Kent have their Kensington Palace apartment rent paid for by the King, a new report has revealed.

The National Audit Office report showed that the late Queen’s cousin and his wife occupy one of three properties inside royal palaces that are rented out to non-working royals. The Royal Household, which manages the lease of these properties, has a policy to typically charge an adjusted rate of around 60% of open market value.

But the NAO report found the rate set is not consistent and not typically at 60%, with the Kents’ property in Kensington Palace having no record of valuation of the lease prior to 2026.

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The prince and princess were dubbed the “Rent-a-Kents” and sparked a scandal when it emerged in 2002 they paid a peppercorn rent of just £69 a week to live in the grand Apartment 10, maintained by the taxpayer, despite not being working royals.

MPs on the Commons’ Public Accounts Committee demanded they pay full rent, but the couple argued that Queen Elizabeth II had given them the use of the Palace as a wedding present.

The late Queen came to the rescue, offering to pay a commercial rate rent of £120,000 a year on their behalf, until they had to find the sum themselves from 2009.

But the new NAO report revealed, in contrast, that their rent is now paid by the King from the Privy Purse. It is understood the late Queen agreed to continue to pay for her relatives after 2009 with the King continuing to honour his mother’s commitment.

It is not known when payment from the Privy Purse began post-2009 and exactly how much the current rent is – but it has now increased 34% between 2020 and 2026, and is 63% of a 2026 open market valuation, the NAO said.

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In other findings, the Duke and Duchess of Edinburgh were shown to pay a peppercorn rent after signing a long lease of 150 years in 2007 for Bagshot Park in Surrey with a payment of £5 million, and Edward’s company, Eclipse Nominees Limited listed as the leaseholder.

Edward and Sophie, like Andrew, are also entitled to sublet on the estate, and generated a private income after renting out the stable complex at Bagshot Park to a third party up to 2020.

It was reported earlier this year that the couple were able to make up to £130,000 per year subletting the stables and an office block.

As well as William, Kate, Andrew and the Edinburghs, the late Queen’s cousin Princess Alexandra lives in Thatched House Lodge in Richmond Park, which is leased to THL Trust.

She currently pays an annual ground rent of £1,500, which alters depending on time lapsed, after a premium payment of £670,000 in 1995, following a previous lease in 1971.

Her daughter Marina Ogilvy has an assured shorthold tenancy on a cottage on the Windsor Estate, and pays an annual rent of £17,436.

The new details have come to light in a report by the National Audit Office (NAO), which was instructed to look at the Royal Family and its property arrangements.

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It came after the Public Accounts Committee, which ensures taxpayers are getting value for money, launched an enquiry into the Crown Estate and its property arrangements with the royals after it emerged Mountbatten-Windsor had barely been paying rent for Royal Lodge. Profits from the Crown Estate are given to the Treasury for public spending.

It also found that Andrew Mountbatten-Windsor was able to rake in cash by sub-letting three cottages in the grounds of Royal Lodge – despite paying just a peppercorn rent for his former home, it has emerged.

The disgraced former Duke of York’s lease for his previous 99-acre Windsor estate allowed him to rent out three of the eight buildings that were within the grounds in a private deal between him and the subletters – and pocket the income himself.

The deal has been shrouded in mystery as there is no clarification on how much money the ex-prince made through subletting or how long they were sublet out for. A royal source claimed Andrew was subletting the cottages to staff at a rate to cover maintenance costs for the Royal Lodge estate.

Pictures taken of the Windsor mansion in the months before he was forced out to live in a smaller Sandringham home showed the property crumbling – with paint peeling from walls and cracks in the brickwork.

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It is understood Mountbatten-Windsor will not be entitled to compensation worth between £300,000 and £400,000 from the Crown Estate for giving up the Royal Lodge lease early due to the dilapidation costs that need to be paid.

Meanwhile, his daughters personally pay nothing for accommodation inside royal palaces – with the King footing the bill, it has been revealed.

It was understood that the York sisters paid market rent for their London homes, with Beatrice having an apartment in St James’ Palace and Eugenie having a cottage within Kensington Palace.

But the new shows the pair, who are non-working royals, do not pay anything with the cost being picked up by the Privy Purse – the King’s private income from the Duchy of Lancaster.

No details of how much he the King pays for Eugenie and Beatrice’s rent were released by the NAO, with the watchdog saying the amounts were private.

It is understood the arrangement for the Privy Purse to pay the York sister’s rent was put in place by the late Queen with Eugenie paying herself for renovations to her cottage at Kensington Palace.

A Buckingham Palace spokesperson said: “We are grateful to the National Audit Office for this report, which is in line with The Royal Household’s commitment to transparency. We hope that the findings will help correct, clarify or contextualise a number of points regarding Royal properties.

“As the report notes, arrangements for properties managed by the Royal Household vary based on a number of factors to ensure residences are filled appropriately, depending on their location, tenants and purpose.”

While a spokesperson for The Crown Estate, said: “The Crown Estate welcomes the National Audit Office’s review, which confirms its leases with members of the Royal Family were agreed in line with independent, professional advice and open market valuations. We look forward to discussing the report further with the Public Accounts Committee in due course.”

But Mr Baker, author of the book Royal Mint, National Debt, says further transparency is needed into royal funding – and a full probe should be launched.

He said: “We need a full open inquiry by parliament’s Public Accounts Committee into all aspects of royal funding, and we need it now. Support for a republic has been growing fast, especially among young people. If the monarchy wants to survive, it had better start reforming itself pretty quickly.”

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