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How Much Is a Holding Deposit, and Do You Get It Back?

In England, a holding deposit can be no more than one week’s rent, and you should get it back unless you pull out, give false or misleading information, fail a Right to Rent check, or stop responding to move the tenancy forward. If the tenancy goes ahead, it must be refunded or, with your agreement, put towards your first rent or your tenancy deposit.

How much a holding deposit can be in England

A holding deposit is money you pay to reserve a home while the landlord or agent does reference and other pre-tenancy checks. Under the Tenant Fees Act 2019, in England:

  • The most a landlord or agent can take is one week’s rent.
  • That limit is per tenancy, not per person. Three people sharing on one agreement pay one week’s rent between them.
  • A landlord or agent cannot accept more than one holding deposit for the same tenancy at a time.
  • A landlord does not have to take a holding deposit at all.

The Act defines one week’s rent as the annual rent divided by 52. If your rent is monthly, that means monthly rent × 12 ÷ 52. Dividing the monthly rent by 4 gives a figure that is too high, because most months are longer than four weeks. See how to convert between weekly and monthly rent.

The deadline for agreement

Once the landlord or agent receives your holding deposit, there is a “deadline for agreement”. By default, this is 15 calendar days after they receive it. You and the landlord can agree a longer or shorter deadline, but that must be agreed in writing.

The deadline matters because it decides when the money must come back if the tenancy does not go ahead.

When you get your holding deposit back

In England, the holding deposit must be repaid within 7 days in each of these cases:

  • You sign the tenancy agreement. It must be refunded within 7 days of the agreement. With your consent, it can instead go towards your first month’s rent or your tenancy deposit.
  • The landlord decides not to go ahead before the deadline. It must be repaid within 7 days of that decision.
  • The deadline passes without an agreement being signed, and none of the exceptions below apply. It must be repaid within 7 days of the deadline.

GOV.UK says a landlord does not have to protect a holding deposit. Once you become a tenant, it becomes a deposit, which they must protect.

When the landlord can keep it

GOV.UK guidance says the landlord or agent can keep the holding deposit only if you:

  • fail a Right to Rent check
  • withdraw from the application
  • do not respond or get in touch to move the tenancy forward
  • give false or misleading information that affects whether you are a suitable tenant

A small mistake that does not affect your suitability, such as a misspelling or a missing previous address, is not a reason to keep it.

If the landlord decides to keep the money, they must tell you why in writing within 7 days. If they do not, they must return it. If you do not get a decision in writing within 7 days, or you disagree with the reasons, you can report it to your local council or apply to the First-tier Tribunal.

Before you pay, GOV.UK advises reading and keeping a copy of the tenancy agreement and checking what deposits you will need to pay.

Worked example (fictional)

Priya wants to rent a flat in England for £1,150 a month.

  • Annual rent: £1,150 × 12 = £13,800
  • One week’s rent: £13,800 ÷ 52 = £265.38 (to the nearest penny, rounded down)
  • So the maximum holding deposit is £265.38.

If an agent asked for £287.50 (£1,150 ÷ 4), that would be more than £22 over the limit. The excess is a prohibited payment.

Priya pays £265.38. She signs the agreement 10 days later. With her consent, the agent takes the £265.38 off her tenancy deposit. Her annual rent is below £50,000, so the tenancy deposit cap is five weeks’ rent: £13,800 × 5 ÷ 52 = £1,326.92. If the landlord asks for the full five weeks, Priya has £1,326.92 − £265.38 = £1,061.54 left to pay once her holding deposit is credited.

Use the tenancy deposit calculator to work out the holding deposit and tenancy deposit limits for your own rent. For the full picture of what you pay before moving in, see the upfront costs of renting in the UK and the five weeks’ rent deposit explained.

Scotland, Wales and Northern Ireland

  • Wales: holding deposits are covered by the Renting Homes (Fees etc.) (Wales) Act 2019. Rent Smart Wales says the maximum is one week’s rent and the deadline for agreement is 15 calendar days from payment, unless both sides agree in writing to extend it. Unless it is put towards the first month’s rent or the security deposit, it must be repaid within seven days of the deadline. The landlord or agent can keep it if you give false or misleading information or fail to enter into the contract.
  • Scotland: mygov.scot says landlords cannot charge a non-refundable holding deposit, and it is an illegal fee you can claim back. Citizens Advice Scotland says that if you paid one, you should ask whether it is refundable or can go towards your deposit or rent.
  • Northern Ireland: nidirect says you will lose a holding deposit if you pull out, and should get it back if the landlord pulls out. If it becomes your tenancy deposit, it must be protected in an approved scheme within 28 days.

Sources

This guide is general information, not legal or financial advice. Report a possible error.