There’s more to the Royal Lodge lease story than the ‘peppercorn rent’ writes Mark Chick.
The details of Andrew Mountbatten-Windsor’s lease for Royal Lodge have been prominent over recent weeks in the media, with multitudes of journalists focusing on his ‘peppercorn rent’ arrangement.
The man formally known as Prince Andrew took out a 75 year-lease on the 30-room residence in 2003, and his lease agreements have been under increased scrutiny since he gave up his titles in October. This followed increasing focus over his links with the late sex offender Jeffrey Epstein (which he rigorously denies).
The scrutiny has become so intense that even Parliament’s spending watchdog has raised concerns over the lease arrangements, with the Public Accounts Committee asking the Crown Estate and Treasury to explain the details behind the Royal Lodge lease, especially around the ‘peppercorn rent’.
However, having reviewed the lease in some detail, it seems to me that to some extent the discussion around the peppercorn rent is something of a misnomer. According to the National Audit Office and Crown Estate, when he took on the lease, the former Duke of York had to pay £5m for renovations, £2.5 towards rent in advance, and an additional £1m premium and then an extra £2.5m for renovations. In addition to paying a premium and agreeing to carry out works he also committed to the ongoing expense and upkeep of the property during the lease term. So, whilst there was no ‘headline’ rent, the occupation was hardly expense free – as I am sure that a 19th century, 30-room property in Windsor is not cheap to maintain.
Regarding the forfeiture of the lease, in a statement issued at the end of October, Buckingham Palace confirmed that ‘His lease on Royal Lodge has, to date, provided him with legal protection to continue in residence. Formal notice has now been served to surrender the lease and he will move to alternative private accommodation.’
From what I can see there is a right on the part of the tenant to invoke a surrender of the premises but this is a right on the part of the tenant only, so if notice is not given by the tenant then how can Buckingham Palace bring the lease to an end? On what terms would a surrender of the lease have been negotiated as absent any agreement this looks likely to be the only way that the Crown could get the property back, as there appears to be no right for the landlord to serve notice on the tenant asking for the property back.
Of course it might also be possible that we cannot see all the documents and that there may well have been a ‘side letter’ or other agreement entered into at the same time indicating some circumstances in which possession would have to be given up.
The Crown’s position would be that if Andrew Windsor served notice that the compensation that the Crown would have to pay would be minimal. This calculation presumably deals with the amortisation of the fit-out costs incurred by the tenant personally.
However, the right to remain in occupation for the next 53 years for him and his heirs and assigns (the permitted occupiers) clearly has significant value as the outgoings during this time are the repair costs (which we might fairly assume are significant). So even if the compensation he would get if he served notice might be ‘minimal’ the capital value of the lease remains significant.
I am not a valuer but in order to procure a surrender on a voluntary basis, presumably the Crown would have to offer some kind of ‘buy back’ in the absence of any agreement to the contrary. That being said, there appears to be an agreement to re-house him and therefore, presumably any deal that has been done is on a voluntary basis and reflects that ‘exchange’ and so this is potentially ‘equivalent’ to that value and / or possibly even of less value.
The only other option would be forfeiture – for a breach of the lease terms but it is not immediately apparent what those grounds might be – the user is as a private residence for him and his family and without more information it is very hard to see how a valid argument could arise to enable this. Ultimately this comes back to the point that it is very likely that we do not have the ‘full facts’ and details of what has been agreed, and of course many of the considerations around Andrew will go beyond the mere immediate property interest that he occupies.
However, taking all this into account it appears that a ‘deal has been done’ to get the property back. As to the exact and full terms of that might be, we can only speculate, but the terms of this must have involved the wider discussions, regarding his titles, and accommodation for his family. We might presume that handing back the lease of Royal Lodge forms part of that and that in order to get a ‘good’ outcome that Andrew Windsor has entered into these arrangements voluntarily.
Mark Chick is the Joint Head of our expert Landlord & Tenant team.
If you have a query concerning leasehold property, then please contact the experts at Bishop & Sewell’s Landlord & Tenant team by emailing leasehold@bishopandsewell.co.uk or call on 020 7631 4141.
The above is accurate as at 15 December 2025.
The information above may be subject to change. The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis
