Princesses Beatrice and Eugenie’s “Grace and Favor” Scandal, Explained

6 min read

It’s not hard to find the British royals, if you know where to look. In July the Prince and Princess of Wales were at the men’s singles finals at Wimbledon. A month earlier Isabelle de la Bruyère, the girlfriend of Lord Snowdon, made her debut in the royal carriages at Royal Ascot. And in early June Harriet Sperling became the toast of the season after marrying Princess Anne’s son Peter Phillips. But two familiar faces have seemingly vanished from the public eye.

Cooped up on palace grounds, or away from London entirely, princesses Beatrice and Eugenie haven’t—aside from the ­Phillips-Sperling wedding—been publicly present since last Christmas. In August Eugenie made headlines when she gave birth to her third child, a girl named Adelaide, but even before that the absence of the sisters set tongues wagging. Some of this has to do with the downfall of their father, the former Prince Andrew, in the wake of revelations about his relationship with Jeffrey Epstein, but the girls’ problems are bigger than just dear old Dad.

Earlier this year an investigation by the National Audit Office into residential property arrangements of the royal family revealed that Beatrice and Eugenie are living rent-free and have been for almost two decades: Eugenie in Ivy Cottage, on the grounds of Kensington Palace, with husband Jack Brooksbank and their three children; and Beatrice in an apartment at St. James’s Palace with her husband Edo Mapelli Mozzi, their two daughters, and a son whom Edo co-parents with American architect Dara Huang.

St. James’s Palace, where Princess Beatrice has a home.

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Kensington Palace, where Princess Eugenie lives at Ivy Cottage.

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The investigation was triggered by another investigation, one by the House of Commons Public Accounts Committee into royal housing arrangements that was sparked by concerns regarding Andrew’s lease of Royal Lodge. The crux of the princesses’ headache, and the reason they have raised government eyebrows, is that royal household accommodations are meant to service “working royals,” those who represent the crown at official events, which the princesses are not. (They are outliers. No other nonworking young royals are currently offered free housing; even Harry and Meghan will have to find their own digs upon their return to the UK. Princess Anne does have a flat in St. James’s Palace, but the 76-year-old does nearly 500 public engagements a year.)

“Politically, it’s risky to attack the monarchy,” says Robert Hardman, author of Charles III: New King. New Court. The Inside Story. “But if politicians can find cracks that are deemed legitimate, they’ll go for it. And this is one of them.”

The setup is what’s known as “grace and favor,” a tradition that dates back to the 18th century of free homes being doled out to whomever the monarch saw fit. Throughout the 1990s, the system was paired back; Queen Elizabeth II started paying voluntary income and capital gains taxes, and the occupants of some grace and favor homes were required to pay rent—often very far below market. “Forget about servants,” says Dickie Arbiter, the queen’s former spokesman. “It’s a roof over their head. It’s not luxury.”

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The princesses with their cousin, Prince William, in 2013. He has indicated that when he becomes king, the already slimmed-down monarchy could become even more streamlined.

The report itself might not set heads rolling, but it revealed a contradiction at the heart of the monarchy. King Charles has promised a slimmed-down operation, so it could be tricky to justify the privilege his nieces—who kept their titles even after their father relinquished his—have been afforded. When the investigation was released, it was Beatrice and Eugenie, not Andrew, who became a hot topic for Mayfair’s chattering class. An opinion piece in the Sunday Times recently said, “When the veil is lifted on the royal finances, a picture emerges of continuing extravagance at tax­payers’ expense, a kind of socialism for the rich.”

Royal watchers may snipe about Beatrice and Eugenie, but those in their circles claim the girls aren’t hiding. “They aren’t living a playboy lifestyle,” one insider says. Another notes, “They are quite popular, and they know an awful lot of people. They’re fun, spirited, and nice to be around. I’m sure that some people will distance themselves, and other people won’t give a monkey’s.” In February Eugenie was spotted at Art Basel Qatar, but the only photo of the trip seemed to be one on influencer Caroline Daur’s Instagram stories. And Beatrice quietly slipped in late to a recent dinner hosted by Nicky Hilton at Lilibet’s restaurant in Mayfair; she skipped the first two hours of the event, and the cameras. “She seemed fine,” says a fellow attendee. “But she was definitely keeping her head down.”

“[Beatrice and Eugenie] are quite popular, and they know an awful lot of people. They’re fun, spirited, and nice to be around. I’m sure that some people will distance themselves, and other people won’t give a monkey’s.”

In 2007 the queen arranged for Beatrice to be accommodated in an apartment at St. James’s Palace ahead of her university matriculation at Goldsmiths, where she got a degree in history. Eugenie began sharing the flat with Beatrice after completing her own degree at Newcastle University. It appears the girls have never personally paid rent, with costs covered at different times by Queen Elizabeth, Andrew, and King Charles. Andrew and the girls’ mother, the former Duchess of York, are also said to have spent hundreds of thousands of pounds of taxpayer money on renovations. “The late queen couldn’t say no to her grandchildren,” Arbiter says.

Their father pushed for more: He wanted them to carry out engagements on behalf of the monarch. Today the group doing that includes the king and queen, the Prince and Princess of Wales, the Duke and Duchess of Edinburgh, and Princess Anne. Under Elizabeth II it was a more expansive offering, but she still didn’t give the princesses the honor.

Instead they embarked on successful careers. After graduating, Beatrice moved into private equity before taking jobs at Sony Pictures, Sandbridge Capital in New York, and Afiniti, an AI software firm. In 2022 she founded BY-EQ, an AI advisory business, and last year she co-founded Purpose Economy Intelligence, a consultancy venture. Eugenie, meanwhile, has had a career in the art world and is currently a director at Hauser & Wirth.

Justin Goff Photos//Getty Images

Beatrice and Eugenie with their parents, the former Duke and Duchess of York, at a 1996 golf tournament.

Still, their grandmother made sure they were looked after. Eugenie moved into Ivy Cottage ahead of her 2018 marriage, and Edo joined Beatrice at St. James’s Palace after their wedding in 2020. Now both couples have second homes: Edo and Beatrice bought a 3.5 million–pound Cotswolds spread in 2021, and Jack and Eugenie spend much of their time at their 3.6 million–pound pile in Portugal.

Any distance between the girls and British society might have more to do with the problems of their parents than their own woes. After Andrew’s disastrous 2019 interview on the BBC’s Newsnight, he was forced to step back from royal duties. In 2022 he settled a lawsuit with Virginia Giuffre, who accused Andrew of sexually abusing her as a teenager, for an estimated 12 million pounds; some of the funds allegedly came from his mother’s private estate. Last summer Andrew Lownie’s book Entitled: The Rise and Fall of the House of York took a further knife to their reputation, alleging that both Andrew and his ex-wife had, for decades, used their positions for personal financial benefit. In November 2025 the king stripped his brother of his titles. The Epstein files were the final straw: Fergie went into hiding, and Andrew moved from Royal Lodge into a residence on the King’s Sandringham Estate—effectively banished. Less than a month later he was arrested (but not charged) on suspicion of misconduct in public office.

“They can never, ever escape from the Andrew of it all,” says Sam McAlister, who negotiated the infamous Newsnight interview on behalf of the BBC. “The reputational damage is so profound that they will, I’m afraid, never ever be able to get out of its shadow.” Arbiter adds that they should “pack up their belongings and move out. They don’t need it, and anybody with a certain amount of common sense would see the optics created by their parents and say, ‘We’re off.’ ”

Estate Planning
Not all grace and favor residences are created equal. Where would you live?
Birkhall
“The second-tier house on the Balmoral estate,” according to royal expert Robert Hardman. ”The late queen mother adored it, and the king still has it.”
Royal Lodge
The 30-room pile in Windsor Great Park is practically perfect—except, Hardman says, for the specter of its last tenants: Andrew and Fergie.
Anmer Hall
Perched on the Sandringham Estate in Norfolk, this is the one the Prince and Princess of Wales nabbed for their private country home.

Beatrice and Eugenie are now symbols of privilege gone wrong. Public tolerance is collapsing, even if their social circles remain loyal. The investigation does not necessarily mean they will be evicted, but it has highlighted a contradiction that is impossible to justify, and neither wants another York scandal. “I can’t imagine that the girls will be in those houses in the long term,” Hardman says. “They’re certainly not forever homes.”

If the king’s “slimmed down” monarchy is a shock, just wait until King William V, who will go further in trimming the fat. To retain relevance and keep the public on side, Beatrice and Eugenie will likely have no choice but to move on, eventually. The question is, will they jump or be pushed?

This story appears in the October 2026 issue of Town & Country.

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