So how come Prince Edward is paying a peppercorn rent as well?

[Ragsandwhathaveyou972]

Can someone help me properly understand this please?

For years I have wondered aloud on here, under various nns, how Prince Edward can afford to live in a £30 million mansion when by all accounts his income is roughly £150,000 per year? Just because it didn’t seem fair!

Full disclosure: I have nothing against the Royals themselves but I would prefer a much slimmed down monarchy and eventually after many years, an elected Head of State.

And the official explanation seemed to be that as he is privately wealthy, he is putting funds in to renovate the property in exchange for a much reduced rent.

https://www.hellomagazine.com/royalty/870243/prince-edwards-peppercorn-rent-revealed/?viewas=amp

So initially, Edward seemed to pay a market rate rent of £5,000, which increased to £90,000 after he paid £1.36 million for renovations.

However, he later secured a 150-year lease extension in 2007 by paying £5 million upfront, and since then, he has been paying a "peppercorn" (a very nominal amount) rent presumably in exchange for keeping it in good nick?

Fair enough you might think. He is privately wealthy and the cost of renovating somewhere that size has to be enormous.

However, what I am really confused about now is the Crown Estate, the body with which these rents are negotiated.

Is it a public or royal organisation?

I initially thought it qualified as a royal organisation because it is owned by the monarch, but its profits go back to the Treasury, which surely then makes it a public body?

So if it is the latter, and its profits go in to the public purse, why are Edward and Sophie and their two dc living in a house with 120 rooms and paying a relatively small rent, when the Crown Estate should be extracting as large a rent for the public purse as possible?

Is this right? Happy to stand corrected.

And my other question is why is this arrangement so complex and the lines between public and private funding
so blurred?

In any other charity or organisation in this day and age, surely you have to have a clear, transparent division between the two?

"Isn’t it all a bit cosy whereby you rent property back and forth to an organisation that you ultimately own, even if the profits are meant to be for the public purse?"

I think you are getting mixed up between the Crown Estates and the Duchy of Cornwall. The Duchy of Cornwall income goes to the Duke of Cornwall to fund his publci, private and charitable activities, it's not public (though it's complicated about what would happen if the roayalty were abolished) and he pays income tax on it. I beleive the trust is set up so that the Duke cannot take any capital from the Duchy, any capital profit (sale of fixed assets likeland or buildings) must be reinvested in the estate.

In return the Duke of Cornwall/Prince of Wales takes no money from the Sovereign grant.

Bagshot Park was used as army quarters for the second half of the 20th Century, and as a result was not in very good condition. To their credit Edward and Sophie spent considerable money on renovations out of their own pocket back when they were still working in their commercial businesses (film and PR respectively) in the 90s. Whereas the queen forked out a huge amount on Andy's marital home.

Also they earn their keep, Sophie and Edward do much of the foreign leg work given Charles health, and William and Catherine family commitments. Both have done several foreign tours this year, including to third world countries so not your usual jolly places either. Sophie was also extremely close to the Queen.

They aren’t really gifts.

Both Anne and Andrew did. Anne still lives in here. Andrew got into debt and had to sell his, as well as being bailed out by Mummy. He was then given the opportunity to live in her childhood home.

In the same way most people who are wealthy are independently wealthy by taking things (legally or illegally) from other people then leaving it to their descendents.

You could argue that the RF do at least feel they have to do something in return. Most super wealthy people do nothing/little for their country.

Anyway can't get into an argument about the RF now -
1 - becasue I don;t much care
2 - I have work to do and puttering around on MN is dragging me into time wasting!

Because it’s a leasehold extension not a rental.

A burning question for me is why on earth do E&S require 130 rooms?

Thats an awful lot of dusting for a family of 4

Bingo.

Charles bought Highgrove and incorporated it into the Duchy of Cornwall. In fairness to him, when he took over the running of the Duchy estates it was being very poorly managed. He completely turned it around and made it more efficient and profitable. He also started donating large sums to Cornish charities and local projects. He then set up the Duchy Originals brand and sold it to Waitrose. The result is that he’s passed on a very successful asset to William.

Well is it any wonder people get confused!

I freely admit to not being the brightest or most informed on this subject. So thanks for the correction but what I am trying to determine on this thread is whether the
Crown Estates is a commercial body or not?

I thought it was owned "in right of the Crown" ,not personally by the king, but in his name, and is managed by an independent body?

As I understand it, the current monarch surrenders the profits from the Crown Estate to the government, which then provides the Sovereign Grant for the monarch's official duties.

But I honestly think there is a deliberate element of making it complicated so people don’t enquire too closely!

If the Crown Estate is a commercial body then its operations should be above board,

As for the duchies; I think it was ok to give them special tax advantages when the UK was ruled by barons, but nowadays they are fully commercial organisations making huge annual profits, so I don’t understand why they have a special status? Plus lots of their land should arguably be public owned anyway eg our coastline!

Well I am glad to consider a balanced picture.

The question is, if Charles has done a good job, which is excellent I agree , then why not be open about all of the figures?

Thanks for everyone’s measured responses,

I think one of the main issues for me, reading all of them, is that we basically trust the RF to manage all of this huge amount of money themselves without much public scrutiny?

Is that a reasonable thing to say?

If the Crown Estate for example is a public body, managed independently and not a royal organisation, then why is it making what most reasonable people would say are quite sweet rental agreements with members of the RF.

If it’s a commercial independent organisation, shouldn’t it be demanding commercial rates?

To be fair, Edward and Sophie do seem to do quite a lot: https://thecrownchronicles.co.uk/royal-news/princess-anne-is-hardest-working-royal-of-2024-engagement-breakdown/

I’m not a royalist but I do quite like the pair of them, as much as you can like someone you don’t know. They seem quite hardworking and sensible. And if their house was a gift from the late Queen then that’s the way it is really.

I’m almost certain it was reported recently that Edward was paying ‘market rate’ for his home when the spotlight was on AMW and Royal Lodge. Seems that was incorrect then.
As @ItsDarkNow says, it’s hard to see where public money ends and private money starts. It’s bullshit when you think about it.

He paid £5 million for a lease in 2007. Until someone can demonstrate that this was significantly under the market value for a leasehold on this property at this time, this is a non story.

I have always been mildly intrigued by how flipping ginormous his house is, compared to any of his siblings houses (prior to Charles being King that is.)

However the article does seem to imply he pays 90k a year in rent, which might be market value (ish), and if he also paid 5M to refurb it, it doesn't sound like he's taking the piss particularly.

So I’ve had a look and initially Edward leased the house for 50 years and was paying £90,000 a year in rent after the renovation was complete, but then paid a lump sum of £5m to extend the lease to 150 years. £90k x 50 would be £4.5m so he’s basically covered what he would have paid in rent for effectively the rest of his life, and presumably the Crown Estate thought that was a better deal since they can invest the money and get a better return.

Anne's estate was bought for her as a wedding gift by the late Queen.

It used to be very common for property to be sold in the form of a very long lease, eg 99 years, and the purchaser would buy the lease for a large upfront sum plus an ongoing peppercorn rent or ground rent. It is basically what happens with flats and some dodgy new builds. It may her fallen out of favour nowaspdays but it would hardly be a surprise if the Crown Estate left some more old fashioned attitudes.

my understanding is that the late Queen gave the lease to Edward as a wedding present.

I suspect some critics are failing to understand the difference between a lease and a rental.

I don’t get how £90,000 pa is considered ‘market rate’. It’s not. So he paid the lump sum of £5m. Still a very good deal and let’s be honest, not market rate.

Ed's £90k a year rent is more than covered if (as is allowed under the terms of his lease) he manages to rent out the converted office space in the stables which was originally Ardent's HQ.

It was on offer fairly recently for around £11k a month which would leave a nice little something over too.

He originally charged Ardent £50k a year for the space. That's the Ardent which declared a profit once in its existence (the year Ed waived the rent) and which was voluntarily dissolved after losses of over £2m.

Highgrove is owned by the DoC which means C3 in paying rent to the landlord was effectively having it recycled back into his own pocket in the form of Duchy profits. W now benefits from the arrangement.

Royal rental and lease agreements have been long overdue for scrutiny. I can quite believe they're all raging over MW's antics finally dragging them into the spotlight.

According to DM POW pays current market rent for their new house. So taking that on face value it’s looking like things might change with the new guard.

though those estimations in the article are between £25k and £100k per month

So who knows???

I think the bottom line is the last bit below, vast estates were handed over to the government in antiquity in exchange for government funding of the royal family. Part of the revenue of the estates that were handed over are used to fund the royal family and they have use of some of the properties. The rest of the revenue goes to the government.

From AI

The relationship between the Crown Estate and HM Treasury is one of oversight and sponsorship, where the Treasury is the Crown Estate's sponsor department. The Crown Estate manages properties "in right of the crown," pays its net revenue to the Treasury, and works with the Treasury to meet its public duty to maintain and enhance the value of its assets. The Treasury uses the Crown Estate's profits to determine funding for the Monarch through the Sovereign Grant.
Key aspects of the relationship

• Sponsorship: The Treasury is the Crown Estate's sponsor department, and the Exchequer Secretary to the Treasury acts as the sponsoring minister. A Framework Document outlines the details of their relationship.
• Financial flow: The Crown Estate's duty is to pay its net revenue profit to the Treasury each year, which is then added to the Consolidated Fund. The Crown Estate has paid over £4 billion to the Treasury in the past decade.
• Sovereign Grant: The Crown Estate's net profit is directly linked to the Sovereign Grant, which funds the King's public duties. The grant is typically a fixed percentage of the Crown Estate's profit from two years prior.
• Governance and oversight: The Crown Estate is an independent commercial business, but it is governed by the Crown Estate Act 1961. The Treasury has general oversight of its business to ensure it fulfills its public duty.
• Operational framework: The Crown Estate works independently but in cooperation with the Treasury, recognizing each other's roles and expertise. A Framework Document published in June 2023 formally outlines this relationship.
• Historical context: The arrangement dates back to 1760 when King George III handed over land and property to the government, with the revenue going to the Treasury in exchange for a fixed annual payment. This evolved into the current system where the profits fund the Monarch's expenses via the Sovereign Grant.

@Sayyaya but unlike a rental, with a leasehold you are responsible for all maintenance, insurance and renovations etc.