Holding Deposit Rules — How Long Can a Landlord Hold It?

What Is a Holding Deposit?

A holding deposit is a sum of money paid by a prospective tenant to a landlord or letting agent to secure a property while referencing, credit checks, and right-to-rent checks are completed. It is distinct from a security deposit (which covers the duration of the tenancy) and is paid before the tenancy agreement is signed.

Use our [rental deposit calculator](/rental-deposit-calculator) to confirm the maximum holding deposit and security deposit amounts for your rent level.

How Much Can Be Charged?

Under the Tenant Fees Act 2019, the maximum holding deposit is **one week's rent**. This is calculated as:

> **(Monthly rent × 12) ÷ 52**

**Example:** If monthly rent is £1,100, the weekly rent is £253.85. The landlord cannot charge more than **£253.85** as a holding deposit.

Charging more than one week's rent is a prohibited payment under the Act. If you have paid more, you are entitled to a refund of the excess, and the landlord or agent may face a Trading Standards investigation.

The 15-Day Deadline

Once a holding deposit is paid, the landlord or agent has a **deadline of 15 calendar days** (the "Deadline for Agreement") to either:

• Enter into a tenancy agreement with you, or
• Return the holding deposit in full

The 15-day clock starts from the date the holding deposit is received. This deadline can be extended by **written agreement** between landlord and tenant — both parties must agree; a landlord cannot unilaterally extend the deadline.

If the 15 days pass and neither a tenancy has been agreed nor a written extension confirmed, the holding deposit must be returned in full regardless of the reason for the delay.

When Can a Landlord Keep the Holding Deposit?

There are only **five circumstances** in which a landlord is permitted to retain all or part of a holding deposit:

1. The Tenant Withdraws

If you decide not to proceed with the tenancy after paying a holding deposit, the landlord may retain it. There is no requirement to explain why they are keeping it in this scenario, though some landlords will apply it against their actual costs.

2. The Tenant Provides False or Misleading Information

If you provide incorrect information on a reference form or application that materially affects the landlord's decision to let the property, the landlord may retain the holding deposit. Honest mistakes do not typically qualify — the information must have been deliberately or recklessly misleading.

3. The Tenant Fails a Right-to-Rent Check

All landlords in England must check that prospective tenants have the legal right to rent. If you fail this check, the landlord may retain the deposit — though if the landlord failed to conduct the check before taking the holding deposit, the position is less clear.

4. The Tenant Unreasonably Fails to Enter Into the Agreement

If the landlord is ready and willing to proceed, and you fail to respond or take action to finalise the agreement without good reason, the landlord may retain the deposit.

5. The Tenant Requires a Tenancy Agreement the Landlord Does Not Agree To

If you insist on specific terms in the agreement that a reasonable landlord would not accept, and this causes the tenancy not to proceed, the landlord may retain the deposit.

What If the Landlord Withdraws?

If the **landlord** decides not to proceed, the holding deposit must be returned in full within **7 days**. A landlord cannot keep a holding deposit simply because they changed their mind, found a better tenant, or chose not to let the property.

Holding Deposit vs Security Deposit

If you go on to sign the tenancy agreement, the holding deposit is typically **offset against the first month's rent or the security deposit** — confirm this in writing before paying.

Protecting Yourself

• Always pay a holding deposit by bank transfer rather than cash, and keep the receipt
• Ask the landlord or agent to confirm in writing what the holding deposit covers and the timeline
• If you pay a holding deposit and the 15-day deadline passes without a signed agreement or a written extension, write to the landlord immediately requesting the return of your funds
• If the landlord refuses to return a holding deposit in circumstances where they are required to, report the matter to your local council's Trading Standards team and consider a claim in the County Court