Holding deposit: cap at one week's rent and refund within 7 days

A holding deposit is taken to reserve housing in England before a tenancy or licence is granted.

Take no more than one week's rent (annual rent / 52) and only one holding deposit for the property at a time. Agree the tenancy by the deadline for agreement (15th day after receipt, or another date agreed in writing). Refund it within 7 days of the tenancy being entered into (unless applied, with consent, to the first rent or the tenancy deposit), of deciding not to let, or of the deadline passing. To keep it (false or misleading information, failed right to rent check, applicant withdraws, or applicant fails to take reasonable steps), tell the applicant in writing why within 7 days.

Deadline

No schema event exists for receipt of a holding deposit. Deadline for agreement is the 15th day of the period beginning with receipt unless another date is agreed in writing (TFA Sch 2 para 2). Refund, or written reasons for keeping it, within 7 days beginning with the tenancy agreement date, the decision not to let, or the deadline for agreement (paras 4 and 5).

• Receipt for the holding deposit showing amount and date
• Written agreement of any different deadline for agreement
• Refund record or written reasons for retention sent within 7 days

Civil penalty

Up to £5,000

Criminal offence

Yes, you can be prosecuted

Other consequences

Financial penalty of up to £5,000; repeat breach within 5 years is an offence or a civil penalty of up to £30,000. Failure to give written reasons in time means the deposit must be repaid.

• Tenant Fees Act 2019, Schedule 1 para 3 (holding deposit cap)legislation.gov.uk
• Tenant Fees Act 2019, Schedule 2 (treatment of holding deposit)legislation.gov.uk
• Tenant Fees Act 2019, s.8 (financial penalties)legislation.gov.uk

Official guidance

A holding deposit need not be protected in a deposit scheme until it is applied to the tenancy deposit; the amount applied is treated as received on the date of the tenancy agreement for the 30-day protection clock (TFA Sch 2 para 7).

• No rent may be requested or accepted before the tenancy is entered intoIn force since 1 May 2026Fine up to £5,000

  You cannot ask for, encourage or accept any rent before the tenancy agreement is signed or otherwise entered into. Holding deposits and tenancy deposits are separate.

• Only charge payments permitted by the Tenant Fees Act 2019In force since 1 June 2019Fine up to £5,000

  You can only require tenants, licensees or guarantors to pay the payments on the Tenant Fees Act list. Everything else, including requiring insurance or paid services, is a prohibited payment.