An elegant Edinburgh property that was given to Queen Elizabeth II in her role as sovereign, and for more than 40 years was managed by the UK government, is being privately rented out by the king for a profit.
The revelation sheds light on the opaque nature of royal wealth, where public and private ownership is often hard to disentangle. It adds to mounting questions around Buckingham Palace’s policy on gifts, which is supposed to prevent official gifts from being treated as private property.
Cost of the crown is an investigation into royal wealth and finances. The series, published ahead of the coronation of King Charles III, is seeking to overcome centuries of secrecy to better understand how the royal family is funded, the extent to which individual members have profited from their public roles, and the dubious origins of some of their wealth. The Guardian believes it is in the public interest to clarify what can legitimately be called private wealth, what belongs to the British people, and what, as so often is the case, straddles the two.
The Georgian house in Edinburgh’s New Town area, which is divided into two flats, was given to the queen in 1953 by its previous owner.
Property records show that in early 1954 it was registered as being held by a government department “as the minister of the crown … for and on behalf of her majesty and her royal successors”, suggesting it was considered an official gift to the queen as the sovereign.
Government papers uncovered by the Guardian show that for decades the property was treated as a state-owned building and used as “grace and favour” homes for dignitaries and employees of the royal household.
But in the mid-1990s, the government stopped taking responsibility for running “grace and favour” properties and handed over their maintenance and management to Buckingham Palace. This did not initially happen to the Edinburgh flats, which a Treasury official noted in 1994 “appear to be set in a time warp”.
The building needed significant upgrading work. There was a long debate involving civil servants and the keeper of the privy purse, the official in charge of the monarch’s finances, about whether the government should meet those costs if the property was about to be given to the royal household.
Officials in the then Department of the Environment had offered the royal family a payment of £6,000, equivalent to more than £11,000 at today’s prices, in lieu of the incomplete modernisation work.
Official government documents show that in August 1995, senior civil servants questioned this arrangement, saying it “would be asking for trouble” if the government gave the royal household money for the renovations, “doubly so as the house might be regarded as the queen’s own property”.
The government’s papers show that civil servants believed the property would remain part of the “grace and favour” estate and be paid for by the royal household after it was handed over to the sovereign.
It has emerged that the apartments, which are estimated to be worth between £1.5m and £1.8m, instead became part of the queen’s private estate. They are held by Canup Ltd, the company that owns the king’s extensive lands and houses at Balmoral and Delnadamph in the Scottish Highlands on his behalf. The flats are being let to private tenants at full market rates.
The palace’s policy on official gifts states that they “are not the private property of the member of the royal family who receives them.”
It is not known whether the queen knew the previous owners of the Edinburgh house – a physician and his wife – before it was donated to her in 1953. It seems unlikely as the queen was only seven when the physician died and his widow then moved to Canada. Certainly, the house was treated as an official gift when it was put into the government’s control in 1954.
Andy Wightman, a Scottish land reform expert and former Scottish Green party MSP, said the house seemed to have been a publicly owned asset used to help the royal family’s employees or people associated with the royal family. That was a form of public benefit, he said.
“Since the property is now being rented out on a commercial basis as part of the king’s personal property portfolio, this historic understanding no longer has any validity,” he said. “The king should pay a market price for the property to the government.”
A palace spokesperson said: “In the 1990s, at the request of the Department of the Environment, the property was handed back to the queen who took on the responsibility for its maintenance and upkeep privately.”
The palace spokesperson did not comment on whether the queen had known its previous owner.
