Prince William and Kate have resigned to living in "too small" Adelaide Cottage for the foreseeable future - despite reportedly eyeing up Andrew's Royal Lodge.
The couple have been living in the cottage on the Windsor Estate with children George, Charlotte and Louis since moving in less than a year ago from Anmer Hall in Norfolk.
But plans by King Charles to downsize the family's property - and news Prince Andrew is being asked to leave his £30million mansion - has thrown things into question.
While the Lodge was at one point reportedly earmarked for the young family of five, OK! reports they are now accepting that they'll be staying there despite it being too cramped for them.
A source has explained that despite the questions hovering around Royal Lodge and the costs needed to repair it, the Duke of York was provided for in Queen Elizabeth's will and, as a result, has been able to come up with the money to make essential repairs.
“The Palace originally wanted Andrew out of Royal Lodge so that the property could be renovated and prepared for new lodgers,” the source said.
“The Prince and Princess of Wales desperately want a larger property for their family in the Windsor area and discussions were originally focused on putting them in there.
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"However, Andrew was having none of it and is adamant that he will see out the end of his lease at Royal Lodge.”
A Kensington Palace source added: “William and Kate love the cottage but it’s just too small for them.
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"There are four bedrooms which just about fit them all in but there are other things that need to be considered. Staff and other elements need to be factored in.”
“It is also meant to be a working residence and there isn’t room to facilitate an office or hold more than a few guests at a time.
"They were looking for a larger home but have now resigned themselves to the fact that they will be stuck in the cottage due to other properties not opening up for them.”
As the Prince and Princess of Wales look set to remain at Adelaide Cottage for the foreseeable future, former BBC royal correspondent Jennie Bond said.
Explaining why she doesn't imagine the royals will be too pent up over the situation, Jennie said: "I’m not sure William and Catherine will be that fussed, they chose Adelaide cottage because they wanted to give the children a more normal lifestyle.
"Of course, they still have the apartment at Kensington Palace, and they have a large house in Norfolk (Anmer Hall) … so they are well acquainted with a grand lifestyle, and perhaps living in a relatively normal four bedroom house (surrounded by thousands of acres of wonderful Windsor estate countryside) isn’t such a bad option.
"As the children grow up, though, and want friends to stay, or William and Catherine want her side of the family to stay, they might find it a bit of a squeeze and would be grateful for the space at Royal Lodge.
"For now, though, I don’t think there’s a great rush."
Nestled in the heart of the Crown Estate's 655-acre royal park, the four-bedroom Adelaide Cottage became the Wales' new home in September 2022.
The cottage was built in 1831 as a retreat for William IV’s wife Queen Adelaide and is known to have been a favourite home of Queen Victoria as she frequently enjoyed taking her breakfast there.
One of the most famous former residents was Princess Margaret's love interest, Group Captain Peter Townsend.
A former RAF pilot and later an equerry to King George VI, Townsend embarked on a famous love affair with Princess Margaret who was 16 years his junior.
The cottage has also been the home to many royal dignitaries and courtiers, most recently Simon Rhodes, the son of the late Queen's first cousin Margaret Rhodes who served as a Lady in Waiting to The Queen Mother.
Rhodes moved his family to the UK from Zimbabwe after they had to flee the continuing violence in the country.