(Image Credit: Matthew Lloyd/Getty Images)

LONDON - The wedding gifts may have included "his and hers" towels but now it looks like Wills and Kate will need an extra set of "his."

Little brother Harry will move out of St. James's Palace, where he shared a suite of rooms with his brother, and into the newlyweds' new digs at Kensington Palace. The two royal brothers know this place well. They used to live there with mother Diana when they were younger.

Harry, 27, is now living in what has been described as a modest one-bedroom apartment. And should the party prince want to have a shindig and boogie the night away in his new pad, he can because it comes complete with a small kitchen and a living room so he won't have to disturb William and Kate, the Duke and Duchess of Cambridge.

Royal commentator Dickie Arbiter says there's plenty of room at the palace, saying, "they will see each other in passing or they will see each other when they come knocking but they won't be on each others' doorstep."

So who says three is a crowd then? It sounds like three is definitely company in this case.

The newlyweds are living in a cottage on the grounds of Kensington Palace, while their apartment, which is Princess Margaret's old place, gets a much-needed million-dollar makeover. Prince Harry will move into the cottage once the renovation is finished next year.

Harry and big brother king-in-training William are said to be very close. "They are tremendous friends, they always have been. William looked out for Harry when Harry was very small, looked out for him when they went to nursery together," Arbiter said, later adding, "Obviously, they became closer in 1997 on the death of their mother."

As for his relationship with Kate, 30, it has been reported that they get on famously and he has even made it public that he has always wanted a sister. "What Catherine is, I think, is a substitute sister for Harry and he gets on well with her; extremely well … looks upon her as that sister he never had," Arbiter says.

The two royals were keen to be living and working together in the same place again, a Palace insider said.