
The house had been in need of renovation and the arrangement saw Prince Andrew taking on that initial cost, more than £7.5m at the time, rather than the Crown Estate having to pay for repairs.
He had also made a one-off payment of £1m to his landlords, the Crown Estate, the independent body that manages crown property, according to documents from the National Audit Office which examined the arrangements in 2005.
There was also the option of a one-off payment of £2.5m as a way of buying out the annual rental.
With its proximity to other royal residences, it was also thought that leasing it to Prince Andrew was a better arrangement in terms of security, rather than offering the house to the “wider market”.
The 75-year lease agreement prevents Prince Andrew from gaining financially from any increase in the value of the house – and apart from the prince the lease can only be subsequently assigned to his daughters or his widow.
If Prince Andrew wants to terminate the lease, it will revert to the Crown Estate.
But there was a clause that if he left the house within 25 years of the start of the lease he would receive compensation for his original payment on repairs – with that amount shrinking each year.
With only four years left on that arrangement he would not stand to recoup much of the £7.5m he spent on renovating the house when he first moved in – with such a front-loading of costs making it less of an incentive for him to move out.
But more than 20 years after taking on the lease, the questions are now about the continuing costs of maintaining such a big property and paying for security – and whether Prince Andrew can afford it out of his own pocket.
There now seems to be increasingly public pressure for a more long-term solution for where the prince will live in the future.
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