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Business
Rebecca Armitage and Lucia Stein

King Charles has offered Prince Harry and Meghan Markle's Frogmore Cottage to Prince Andrew. But could it create more problems?

King Charles is reportedly considering removing Prince Andrew from the Royal Lodge. (Reuters: Peter Cziborra)

It's the kind of rental agreement most people could only dream of: A gorgeous 30-room mansion available on a 75-year lease that costs the tenant the equivalent of $440 a week.

For King Charles's younger brother Prince Andrew, this was the sweetheart deal he cut with his late mother, Queen Elizabeth, for the Royal Lodge.

The lavish property, first built in 1662, is a 15-minute drive from Windsor Castle, which was considered to be the late Queen's favourite home.

Prince Andrew was often seen riding horses with his mother around the grounds of the Royal Lodge before her death last year.

But while he still has 56 years on his lease, the Duke of York's allies have told British tabloids he fears he will soon be forced to vacate the property.

King Charles has reportedly informed several family members, including his brother, that he will be cutting their annual allowances from April.

Prince Andrew says the upkeep of the sprawling estate costs him far more than anyone realises, and he cannot afford to live there without his brother's financial support.

As the brewing dispute over finances played out in the tabloid press, a possible solution was soon spruiked.

Prince Andrew could downsize and move into Prince Harry and Meghan, Duchess of Sussex's vacant and recently renovated UK home of Frogmore Cottage.

With Charles's brother weighing up the offer, the idea has reportedly shocked the Sussexes, who would no longer have access to the one secure location left for them in Britain.

"It all feels very final and like a cruel punishment," a friend of the couple was quoted as saying by royal reporter Omid Scobie.

With the family drama playing out in public, the issue has once again exposed one of King Charles's most challenging tasks as monarch.

As he tries to ensure the monarchy's survival in a modern world, he is left with a quandary: How does he transition the British royal family to a 'slimmed down', low-cost model, when so many members are economically dependent on him?

A sweet deal with a hefty reno job

The Royal Lodge is part of the Crown Estate, a collection of lands and other assets worth $27 billion that belongs neither to the government nor the monarch.

Unlike Balmoral Castle in Scotland, which is the royal family's private property, assets that are part of the Crown Estate are overseen by an independent body.

Queen Elizabeth grew up in the Royal Lodge before passing it to her mother, and then her son Prince Andrew.  (Flickr: Ben Sutherland under Creative Commons 2.0)

The Queen Mother lived in the Royal Lodge rent free, under a so-called "grace and favour" arrangement with her daughter for five decades.

When she died in 2002, Prince Andrew approached the Crown Estate and said he had always loved the house and would like to move in.

With seven bedrooms, a "gothic saloon", and a gardener's cottage, it has long been a favourite among the royal family's collection of 30 homes.

Prince Andrew agreed to sign a 75-year lease for a one-off lump sum rental payment of $1.79 million, which works out to be $440 a week.

The arrangement also states that if he dies before the lease is up, his daughters Princess Beatrice and Princess Eugenie would have the option of taking it over.

But there was a catch.

The mansion was more than three centuries old and in desperate need of repairs. If Prince Andrew moved in, he had to pay for the refurbishments himself.

It was estimated that the property needed $13 million in renovations, but Prince Andrew told the Crown Estate he needed to spend more than this to get the house up to scratch.

He has lived at the Royal Lodge with his ex-wife Sarah Ferguson, and occasionally their adult daughters, ever since.

Then came reports last week that he may soon be turfed out.

The royal family's financial shake up

As the Prince of Wales, Charles made no secret of his desire for a slimmed-down monarchy with lower costs and less pomp and ceremony.

In a shake up to Queen Elizabeth II's expansive family model, her son envisioned a modern, streamlined House of Windsor with fewer working family members.

It's long been reported King Charles has dreamed of a "slimmed down" monarchy. (Reuters: Toby Melville)

As for those who aren't delivering speeches, cutting ribbons or serving the family, Charles appears to be sending a message they can use their own money to pay for things.

Ahead of his coronation, the Telegraph has reported Charles is planning to reduce the annual allowance provided by the Duchy of Lancaster.

Buckingham Palace has not publicly commented but the BBC reported it understands any discussions would be a private family matter.

It's not clear how much has been cut, but Charles has reportedly told his brother Andrew he won't be left "homeless and penniless".

As a working royal, Prince Andrew was paid a yearly allowance of $445,000 from his mother's Duchy of Lancaster, a portfolio of land, property and assets held in trust for the sovereign.

He also receives an annual Royal Navy pension of just $36,000.

But everything changed for him in 2019.

After a disastrous interview with the BBC to explain his connection with late sex offender Jeffrey Epstein, the prince was forced to step back from royal duties.

He has not held a full-time job since then and is unable to sell the Royal Lodge given it's on a 75-year lease.

Prince Andrew's future lodgings are a matter of speculation. (Reuters: Tom Nicholson)

The Queen, who was long-rumoured to have a soft spot for her third-born, continued to help her son financially.

She was reported to have helped pay for his settlement with alleged Epstein trafficking victim Virginia Giuffre.

But when Charles ascended the throne last year, he immediately set about diluting Prince Andrew's responsibilities and tightening the royal purse strings.

In some cases, the King has offered compromises.

When Prince Andrew's taxpayer-funded protection was stripped, King Charles reportedly offered to continue to pay for his brother's private security guards out of the Lancaster funds.

Frogmore Cottage, pictured here in 1872, was given to Prince Harry as a wedding gift by his grandmother Queen Elizabeth II.  (Wikimedia Commons: Thomas Ingram)

And when it became clear Prince Andrew could not continue the upkeep of his home on a reduced allowance, King Charles provided an alternative residence: Frogmore Cottage.

A brother is saved, while a son is exiled

The decision to strip Harry and Meghan of their UK residence has gone down like a lead balloon.

The couple's decision to leave the royal family came with grave consequences, including the loss of publicly-funded security.

Harry and Meghan appear set to lose their UK home in Frogmore Cottage, which they paid to have renovated. (Reuters: Steve Parsons)

Prince Harry has since taken the British government to court over his security arrangements in the UK, given the legitimate fears he holds for his family's lives.

With the judgement still looming, the couple were said to be stunned by the eviction notice.

The couple spent 2.4 million pounds ($4.2 million) of taxpayers' money on renovating the house following their marriage in 2018, but were forced to pay it all back after stepping back from their duties.

The repayment was made with the understanding the cottage would remain their UK residence, leaving an open question over whether they will be reimbursed for some of the costs if Prince Andrew were to move in.

Unnamed sources told Yahoo that Meghan and Harry have been told they would need to vacate by early summer, which would fall after the coronation.

There is still no confirmation on whether the couple will be invited to attend.

Meanwhile, The Sun newspaper reported that Prince Andrew wanted to stay in his current home nearby rather than move to Frogmore Cottage.

The optics are not good for King Charles, who in assisting his disgraced brother, has denied his son and daughter-in-law access to a safe refuge in the UK.

A low-cost, modern monarchy may seem like a safe way for a new King to win over a sceptical public.

But it has also exposed deep divisions in the House of Windsor that may need to be resolved before his ambitious vision can be realised.

The ascension of King Charles has shaken up the lives of many royals. (AP: Hannah Mckay/Pool Photo)
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