Explained: The controversy surrounding Prince Andrew's Royal Lodge and its ‘peppercorn rent’

New revelations have emerged about Prince Andrew’s residence, the Royal Lodge in Windsor and it’s rental arrangement and ongoing public funding concerns.

Questions are mounting about how the Duke of York – who has been under the lens for years due to his association with convicted sex offender Jeffrey Epstein – continues to occupy a sprawling 30-room mansion on the Crown Estate while reportedly paying little to no rent.

UK Prime Minister Keir Starmer has now supported calls for a formal parliamentary review into the property arrangement.

During a recent session of Prime Minister’s Questions, Liberal Democrat leader Ed Davey challenged the prime minister, citing the need to “properly scrutinise the crown estate to ensure taxpayers’ interests are protected.”

He asked whether the prime minister agreed that the issue should be investigated through a select committee, allowing all involved parties — including Prince Andrew — to testify before MPs.

Responding to the query, Starmer said, “It’s important in relation to all crown properties that there is proper scrutiny, I certainly support that.”

His comments reflected growing political consensus that the matter warrants parliamentary attention, given that profits from the Crown Estate are directed to the Treasury and, by extension, taxpayers.

What is the controversy around the “peppercorn rent”?

At the heart of the debate is the fact that Prince Andrew, 65, and his former wife, Sarah Ferguson, have paid only a nominal “peppercorn rent” for Royal Lodge since moving in more than two decades ago.

The term refers to a symbolic or token payment, often as little as one pound per year, used to make a contract legally binding.

The lease agreement was formalised in 2003, when the prince paid £1 million upfront for a 75-year lease, expiring in 2078.

In exchange, he committed to approximately £7.5 million in renovations to the Grade II-listed property, which had previously been the residence of the Queen Mother until her death in 2002.

The lease was approved by the Crown Estate during Queen Elizabeth II’s reign, based on advice that the property could not be safely rented on the open market due to security requirements for a royal occupant.

Documents from 2002 indicated that the property could have commanded a rent of at least £260,000 annually if it were let commercially. Adjusted for inflation, that figure would now exceed £486,000 per year, according to the Bank of England’s inflation calculator.

Yet, the prince’s annual rent remains a token amount — “one peppercorn (if demanded)” — a detail that has provoked public criticism and raised questions about whether taxpayers are losing out on significant revenue.

The lease contains specific clauses outlining Andrew’s rights and responsibilities as tenant. He must not use the Royal Lodge for “any illegal or immoral purpose,” nor cause a “nuisance, annoyance or disturbance” to the Crown Estate or his neighbours.

The agreement also makes him responsible for all maintenance, insurance, and periodic repainting of the property’s exterior every five years.

Despite the limited rent, Andrew’s lease is legally robust. There is no break clause allowing the landlord — the Crown Estate — to repossess the house before 2078 unless he fails to meet his obligations.

Should the prince voluntarily surrender the lease, he would be entitled to compensation for part of his renovation investment.

Current calculations indicate that the Crown Estate would owe him about £558,000 if he gave up the property now, along with an annual compensatory payment of £185,865 until 2028.

However, if he fails to pay his peppercorn rent within 21 days of March 31 each year, or violates the terms of his lease, he could theoretically forfeit the property, reported UK’s The Telegraph.

Legal experts note that before any forfeiture could take place, the Crown Estate would be required to provide him with formal notice and reasonable time — potentially up to 28 days — to correct the issue.

What are Starmer & Co. going to do about this?

A recent YouGov poll found that four in five Britons believe Prince Andrew should be formally deprived of his dukedom.

Out of nearly 6,700 adults surveyed, 63 per cent said they “strongly” supported the move, while 17 per cent “somewhat” agreed. Only 6 per cent opposed the idea, with 14 per cent undecided.

Following the disclosures, senior Conservative MP Robert Jenrick remarked that it was “about time Prince Andrew took himself off to live in private,” adding that “the public are sick of him.”

Republican advocacy group Republic echoed this sentiment, calling for a “full, unrelenting investigation” into royal connections with Jeffrey Epstein and the degree of institutional protection extended to the prince over the years.

Starmer’s endorsement of parliamentary scrutiny came shortly before Labour MP Rachael Maskell introduced a bill proposing to grant the monarch new powers to remove peerages or titles.

Under her proposal, the King could revoke such honours either on parliamentary recommendation or at the request of the individual concerned.

Maskell explained that while the measure was prompted by the Andrew controversy, it could also apply to members of the House of Lords who bring the institution into disrepute.

Although the bill’s passage remains uncertain without government support, the move underscores wider efforts to modernise accountability mechanisms within the royal and political establishment.

Ministers have so far insisted that decisions about royal titles rest solely with the King, rather than Parliament.

In the same parliamentary session, Starmer’s comments were followed by a statement from Downing Street encouraging the prince to cooperate fully with law enforcement.

“Our position on that is, as with any criminal investigation, or any investigation led by law enforcement authorities, where people have information that is relevant, they should, of course, share that information proactively,” a government spokesperson said.

The renewed focus on Andrew’s legal and moral standing coincides with the publication of Nobody’s Girl, the posthumous memoir of Virginia Giuffre, who has accused Epstein of trafficking her for sex.

Giuffre has alleged that she was forced to have sex with Andrew three times — accusations that the prince has “vehemently denied.” Andrew has consistently maintained his innocence and has not been charged with any criminal offence.

What do we know about the Royal Lodge?

Royal Lodge, located about three miles south of Windsor Castle in Windsor Great Park, has a long and storied past.

The estate spans 98 acres and includes multiple ancillary buildings such as a gardener’s cottage, six lodge cottages, the Chapel Lodge, and police quarters.

Among its notable features are a formal drawing room, a saloon, a conservatory, and seven principal bedrooms spread over the upper floors.

The property also houses Y Bwthyn Bach (“The Little Cottage”), a miniature playhouse gifted to the then-Princess Elizabeth by the people of Wales in 1932.

Royal Lodge was first constructed in the mid-1600s and was originally known as Lower Lodge or Great Lodge.

Over the centuries, it has served as accommodation for several royal and official figures. In the mid-18th century, it was home to Thomas Sandby, a military topographer and deputy ranger of the Great Park.

Later, the property was inhabited by Joseph Frost, a senior royal estate manager.

By 1812, George, Prince of Wales — later King George IV — used the house as temporary lodging. The building was largely demolished under King William IV in 1830, save for the conservatory, and was subsequently rebuilt.

By 1840, it was being used to house senior members of the royal household.

In the 20th century, the estate became synonymous with the Queen Mother, who occupied it from 1952 until her death in 2002.

It was here that King George VI and Queen Elizabeth (later the Queen Mother) lived as Duke and Duchess of York before ascending the throne, and it served as a cherished family retreat where Princesses Elizabeth and Margaret spent much of their childhood.

After the Queen Mother’s passing, the property underwent significant renovation under Prince Andrew, funded privately.

His family moved in following completion in 2005, and in 2018, the Royal Lodge hosted the wedding reception of his younger daughter, Princess Eugenie, after her marriage at Windsor Castle.

Further controversy has arisen over reports that Andrew invited suspected Chinese agent Yang Tengbo to his 60th birthday celebration at the Royal Lodge in 2020.

While there is no suggestion of criminal wrongdoing within the property, security sources reportedly considered his connections with Chinese officials a “national security concern” as early as 2021.

What next for Prince Andrew?

Because the agreement was negotiated with the late Queen and structured as a private transaction under the Crown Estate, it affords Andrew long-term security despite his public fall from grace.

The terms allow him to pass the lease to his daughters — Princesses Beatrice and Eugenie — or to a trust established for them, but this cannot occur in the final five years of the agreement or after 2073.

Security considerations also make the property unique. The Crown Estate originally justified the peppercorn arrangement on the grounds that few, if any, private tenants could meet the security standards required for a royal residence in such a location.

Yet critics argue that the circumstances have changed substantially, and the rationale no longer holds for a non-working royal.

Although Prince Andrew announced last week that he would give up the use of his royal titles, formal removal of his dukedom would require an act of Parliament — something not seen in modern times.

Meanwhile, campaigners argue that the Crown Estate, as a public institution, should ensure that all its assets are managed transparently and profitably for taxpayers.

With inputs from agencies