Holding deposits: the rules, the refund, and what to check first

The agent has just said the flat is yours if you can "secure it today", and there is a link in your email asking for £450. You have seen the flat for eleven minutes. This is the holding deposit, and it is one of the few bits of renting where the law is actually precise. Worth knowing the numbers before you tap the link, and what to look up while the agent waits.

How much can a holding deposit be, and what happens to it?

One week's rent, no more. Take the monthly rent, multiply by 12, divide by 52. For a flat at £1,950 a month that is £450. Anything above it is a prohibited payment under the Tenant Fees Act 2019, and the landlord or agent can be fined by trading standards.

Paying it does two things. It takes the property off the market for you, and it starts a clock. The landlord and you have 15 days to agree the tenancy, unless you both agree a different deadline in writing. Once you sign, the holding deposit comes off your first month's rent or your tenancy deposit; it is not an extra charge. Since May 2026 the Renters' Rights Act has also banned rental bidding, so the advertised rent is the rent, and a landlord cannot invite you to top it up.

Is a holding deposit refundable?

Usually, yes. If the landlord pulls out, fails to sign by the deadline, or tries to add a fee or a term you did not agree, the full amount must come back within 7 days. The same applies if the landlord simply picks someone else.

It can be kept in four situations. You give false or misleading information that reasonably affects the decision to let to you, such as inventing a salary. You fail a right to rent check. You withdraw. Or you fail to take reasonable steps to enter the tenancy, which means ignoring the paperwork for two weeks. If the landlord keeps it, they must tell you in writing, with the reason, within 7 days of deciding not to go ahead, or of the deadline passing. A landlord who keeps it for "admin" or "we had to relist it" is outside the Act.

If a dispute goes nowhere, you can take the landlord to the First-tier Tribunal, and your council's trading standards team enforces the Act.

Is it different in Wales and Scotland?

Yes. Wales has its own law, the Renting Homes (Fees etc.) (Wales) Act 2019. It also caps holding deposits at one week's rent and requires a refund within 7 days unless an exception applies. The landlord must give you set information before taking the deposit, and the rules on what counts as a permitted payment differ slightly. Scotland is stricter. Charging any fee or premium to get a tenancy is illegal, and a holding deposit that is not returned or put towards your rent or deposit counts as an illegal premium. Northern Ireland has its own rules and this article does not cover them.

What should I check before I pay?

Five minutes of looking is worth £450 of waiting. Ask the agent for the landlord's full name and check the Land Registry title register [check: landlord]; it costs £7 and tells you whether the person taking your money owns the flat. Check the council's HMO and selective licensing register if it is a shared house or in a licensing area, because an unlicensed landlord can face a rent repayment order. Check the EPC: the legal minimum for letting is band E [check: epc]. Look at the listing's history on the portal; a flat let three times in eighteen months is telling you something about the flat or the landlord. Then ask the agent in writing to confirm the deadline date, the amount, and that it will come off the first month's rent.