A holding deposit is the payment that takes a rental property off the market while referencing is completed. It is capped at one week’s rent, it must be dealt with inside 15 days, and in most circumstances you get it back or it comes off your first payment. Anyone asking for a month’s rent to hold a property, or adding an admin or referencing fee on top, is acting unlawfully.
The cap comes from the Tenant Fees Act 2019 and survived the Renters’ Rights Act 2025 unchanged. What did change on 1 May 2026 is the surrounding market conduct: landlords and agents in England can no longer invite or accept offers above the advertised rent, which removes the bidding war that used to make people hand over money quickly and ask questions later.
Quick answer: Maximum one week’s rent, calculated as monthly rent multiplied by 12 and divided by 52. The landlord has 15 calendar days to agree the tenancy unless a different date is agreed in writing. If it does not proceed and none of four narrow exceptions applies, the money must be returned within 7 days. If it does proceed, it is credited to your first rent or your tenancy deposit.
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The caps, and how to check yours
| Monthly rent | One week’s rent, the maximum | Security deposit cap, 5 weeks | Total legitimate up-front ask |
|---|---|---|---|
| £800 | £184.61 | £923.08 | Deposit plus first month, not both deposits |
| £1,000 | £230.77 | £1,153.85 | The week is credited, not additional |
| £1,200 | £276.92 | £1,384.62 | As above |
| £1,500 | £346.15 | £1,730.77 | As above |
| £1,890 | £436.15 | £2,180.77 | As above |
The calculation trips people up because a week is not simply a quarter of a month. Multiply the monthly rent by 12 to get the annual figure, then divide by 52. On £1,200 a month that is £276.92, not £300. An agent rounding up to a neat number is charging more than the law allows, and the difference is recoverable.
The security deposit is a separate thing with its own cap: five weeks’ rent where the annual rent is under £50,000, and six weeks above that. The holding deposit is not an extra charge on top of everything else. Once the tenancy is agreed it is credited against your first rent payment or rolled into the security deposit, so the money is not lost.
Only one holding deposit can be taken per property at a time. If an agent has taken money from two applicants for the same flat, that is a breach rather than a competitive process.
The 15-day deadline and what it actually requires
From the day the money is received, the landlord or agent has 15 calendar days to enter into the tenancy agreement. This is the deadline for agreement. It can be extended, but only if both sides agree in writing before it expires.
Fifteen calendar days is not fifteen working days, and the clock starts on receipt rather than on the day referencing begins. In practice that is a tight window once employer references, previous landlord references and credit checks are involved, particularly if anyone is on holiday.
If the deadline passes without a tenancy being agreed, and the delay is not your fault, the money must be returned. That includes the common scenario where you have provided everything asked for promptly and the agent has simply not finalised the paperwork in time. Their administrative delay is not your problem.
Get the date in writing when you pay. A receipt stating the amount, the date received, the property, and the deadline for agreement gives you everything needed if a dispute follows. Agents that operate properly issue this without being asked; the ones that do not are worth being careful with.
Where a refund is due, it must be paid within 7 days of the tenancy being declined, the deadline passing, or the landlord withdrawing.
The four grounds for keeping it
A landlord may lawfully retain the money in only four situations: you provide false or misleading information, you fail a Right to Rent check, you withdraw from the proposed tenancy, or you fail to take reasonable steps to enter the agreement while the landlord does take such steps.
| Ground | What it means in practice | Where it is often misapplied |
|---|---|---|
| False or misleading information | Misstating income, employment or rental history in a way that affects the decision | A minor discrepancy that would not have changed the outcome |
| Failing a Right to Rent check | No legal right to rent property in England | Delays caused by the Home Office rather than by you |
| Withdrawing from the tenancy | You change your mind and pull out | Withdrawing because terms changed after you paid |
| Not taking reasonable steps | Ignoring emails, not supplying ID, not signing | Being blamed for the agent’s own slow process |
The most commonly misapplied ground is failing referencing. Simply not passing a referencing check is not, by itself, one of the four grounds. If you disclosed your income and circumstances accurately and the referencing agency declined you on affordability criteria you were never told about, the deposit should come back.
The false information ground requires the information to be relevant to the decision. Getting a former postcode slightly wrong is not the same as overstating your salary by £10,000.
Where a landlord retains the money, they must set out in writing why, within 7 days of deciding. A retention without a written explanation is not compliant.
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What the bidding ban changed
Since 1 May 2026, landlords and letting agents in England must publish an asking rent and cannot invite or accept offers above it. Rental bidding wars are prohibited, which removes the pressure tactic that pushed applicants into paying holding deposits on properties they had barely seen.
The practical effect on holding deposits is indirect but real. Under the old system, an applicant who hesitated risked being outbid, so agents could compress decision-making into hours. The advertised rent is now the rent, which means there is no advantage in paying faster than the person behind you.
Use that. There is no longer a reason to pay a holding deposit on a property you have not viewed, on terms you have not read, or before you know what the referencing criteria are. Ask what income multiple the referencing uses, whether a guarantor will be required, and what the tenancy terms say about pets and rent review, all before any money moves.
If an agent implies that paying more will secure the property, that is now unlawful in England rather than merely sharp practice. Scotland and Wales operate under their own frameworks, and rules differ, so check the position where you are renting.
Guarantors, students and non-standard applicants
A guarantor requirement is not a prohibited payment, but a fee charged for referencing the guarantor is. Where a guarantor is needed, arrange one before paying anything, because a failure to produce one in time can be treated as not taking reasonable steps.
Students, the self-employed, people newly arrived in the UK and anyone on a variable income are the groups most likely to be asked for a guarantor. The request itself is legitimate. What is not legitimate is charging you for the guarantor referencing, or for the tenancy agreement, or for an inventory, all of which are banned under the Tenant Fees Act.
Guarantors are usually required to be UK-based homeowners with income of around 30 times the monthly rent. Ask what the criteria are before you pay, and confirm the guarantor can meet them and is available to sign within the 15-day window. A guarantor on holiday for a fortnight is a genuine cause of failed applications.
An alternative some agents accept is rent in advance instead of a guarantor. Be careful here: rent in advance is not a prohibited payment, but it is a large sum to hand over, and it should never be requested alongside a demand for more than one week as a holding deposit. If both are being asked for in an unusual combination, that is worth questioning before paying.
Students moving into halls or shared houses face this most often. The wider practicalities of those moves are covered in our student removals guide.
Getting it back when a landlord refuses
We mapped the escalation route for a wrongly retained holding deposit, because the penalties available are substantial and most tenants do not realise how strong their position is.
| Step | What to do | Timescale | Why it works |
|---|---|---|---|
| 1. Written request | Email citing the Tenant Fees Act 2019 and asking which of the four grounds applies | Allow 7 days | Most retentions collapse when the ground has to be named |
| 2. Agent’s complaints procedure | Formal complaint in writing | Usually 8 weeks maximum | Required before redress escalation |
| 3. Redress scheme | The Property Ombudsman or Property Redress Scheme | Free to use | All agents must belong to one by law |
| 4. Trading standards | Report to the local authority | Varies | They enforce, with penalties up to £5,000 |
| 5. County court | Small claim for the sum | Weeks to months | Straightforward where the facts are documented |
Two findings are worth carrying into a dispute. First, breaching the Tenant Fees Act carries a financial penalty of up to £5,000 for a first offence and up to £30,000 or criminal prosecution for repeat breaches, enforced by local authority trading standards. A letting agent facing that exposure over a £277 holding deposit will usually settle at step one.
Second, letting agents are legally required to belong to a government-approved redress scheme, and using it costs you nothing. That is a genuinely effective route that most tenants never reach because they stop after an unanswered email.
Keep everything: the advert, the receipt, every email, and any message where the agent set out what was required. Documented facts are what make each of these steps quick.
This is general information rather than legal advice. Rules differ across the UK nations and change over time, so check the current position or speak to Citizens Advice or Shelter about a specific dispute.
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When paying one is a bad idea
Do not pay before viewing the property in person, before seeing the tenancy terms, or if you are not confident you will pass referencing on the criteria being used. Withdrawing is one of the four grounds for retention, so uncertainty on your side is the expensive kind.
Agents will not volunteer this, because taking the deposit is how a property comes off the market. The asymmetry is that they lose nothing if it falls through and you can lose a week’s rent.
The referencing point is the one to think hardest about. Most schemes want annual income of around 30 times the monthly rent, and will look at credit history and employment status. If you are self-employed with recent accounts, on a probationary period, or have a county court judgment, ask what the criteria are before paying rather than discovering them afterwards. A guarantor arranged up front is far easier than one found in a panic on day twelve.
Be careful too with remote lettings. Paying to hold a property you have only seen in photographs is how rental fraud works, and the Renters’ Rights Act does nothing to protect you from someone who is not a real landlord. Verify the agent is a member of a redress scheme and a client money protection scheme before transferring anything.
Once the tenancy is agreed, the rest of the process is covered in our guide to how rolling tenancies work now, including the two months’ notice that applies when you eventually leave.
How EcoGreen Movers fits around a new tenancy
Rental moves run to short notice, because a tenancy is often agreed a fortnight before the start date. EcoGreen Movers holds capacity for exactly this and quotes on a fixed basis, so a booking made at short notice is not priced as an emergency.
We handle residential moves across the UK, including London, Manchester and Edinburgh, using reusable crates that suit flats and stair carries better than cardboard. Get in touch for a quote.
Frequently asked questions
How much can a landlord ask for?
No more than one week’s rent, calculated as monthly rent times 12 divided by 52. On £1,200 a month that is £276.92. Anything above that is a prohibited payment under the Tenant Fees Act 2019, as is any separate admin or referencing fee charged on top.
Is it refundable?
In most cases yes. If the landlord decides not to proceed, or the 15-day deadline passes through no fault of yours, it must be returned within 7 days. If the tenancy goes ahead it is credited to your first rent or your security deposit, so it is not lost either way.
Can it be kept if I fail referencing?
Not automatically. Failing referencing is not itself one of the four lawful grounds. It can be retained if you gave false or misleading information relevant to the decision. If you disclosed your circumstances accurately and were declined on criteria you were never told, the money should come back.
How is it different from the tenancy deposit?
The holding deposit reserves the property during referencing and is capped at one week’s rent. The tenancy or security deposit protects against damage and arrears during the tenancy, is capped at five weeks’ rent for most lettings, and must be protected in a government-approved scheme.
Can an agent take one from several applicants?
No. Only one may be held for a property at any time. Taking money from multiple applicants for the same property is a breach, and since May 2026 inviting offers above the advertised rent is separately prohibited in England.
In summary: one week, fifteen days, four exceptions
Check the figure against the weekly calculation before paying, get a written receipt showing the date and the deadline for agreement, and understand the four grounds on which it can be kept. Those three steps prevent almost every dispute that arises here.
If it is wrongly retained, ask in writing which ground applies. Most retentions do not survive that question, and behind it sit a free redress scheme and trading standards penalties that dwarf the sum in dispute.
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