Holding deposit rules: how much, how long, and when you can keep it

In England, a holding deposit is a capped pre-tenancy reservation payment, with similar but separate rules in Wales. Scotland’s verdict is different: a holding deposit is an unlawful premium for a private residential tenancy; Northern Ireland has no statutory holding-deposit regime, so the terms depend on the bargain made.

What is a holding deposit?

A holding deposit in England is money paid before the tenancy is granted to reserve the property while referencing, checks and agreement are completed. The Tenant Fees Act definition is money paid “before the grant of a tenancy” to a landlord or letting agent and dealt with under Schedule 2, and GOV.UK describes it as a deposit “to hold the property while you undertake reference and pre-tenancy checks.” In Wales, the statutory idea is first refusal: the payment is made for “reserving a right of first refusal” while suitability checks and agreement are dealt with. A tenancy holding deposit is therefore not the same thing as rent in advance or a security deposit. OpenRent holding deposit rules are a platform practice inside the England/Wales legal framework, not a separate law. In Scotland, landlords and agents cannot lawfully charge a holding deposit for a private residential tenancy; in Northern Ireland, nidirect treats it as confirming the applicant’s intention to rent.

What is the difference between a holding deposit and a tenancy deposit?

A holding deposit reserves a proposed tenancy before it is signed; a tenancy deposit is security for obligations under the tenancy after or on grant. In England, GOV.UK states: “Your landlord does not have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed).” By contrast, the Housing Act 2004 says: “Any tenancy deposit paid to a person in connection with an assured tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.” The money can change character: if a holding deposit is put towards the tenancy deposit, the Tenant Fees Act treats it as received for deposit-protection purposes “on the date of the tenancy agreement.” The size rules also differ: England caps holding deposits at one week’s rent, but tenancy deposits at five weeks’ rent where annual rent is below £50,000. Northern Ireland also separates them: “A holding deposit is not a tenancy deposit and doesn’t need to be protected.”

How much can a landlord take as a holding deposit?

In England, the maximum holding deposit is one week’s rent, calculated as annual rent divided by 52; anything above that is a prohibited payment. The Tenant Fees Act says: “If the amount of the holding deposit exceeds one week's rent, the amount of the excess is a prohibited payment,” and defines one week’s rent as “the amount of the annual rent payable in respect of the tenancy immediately after its grant, renewal or continuance divided by 52.” So at £1,300 pcm, the England cap is £300: £1,300 × 12 ÷ 52. OpenRent holding deposit amount examples should be checked against that formula, not monthly rent divided by four. Wales also caps the holding deposit at one week’s rent under the occupation contract, but Welsh guidance uses monthly rent divided by 4.35 and the Welsh Act does not set England’s annual-divided-by-52 formula. Scotland has no lawful holding-deposit amount. Northern Ireland has no statutory holding-deposit cap, although tenancy deposits are capped separately.

How long does a holding deposit hold the property?

GOV.UK’s own guidance and OpenRent’s own worked example both miscalculate the deadline as fifteen days after receipt; the Act counts the receipt day as day one, so the true deadline is fourteen days after receipt — a day earlier than both sources say. In England, the statutory “deadline for agreement” is “the fifteenth day of the period beginning with the day on which the landlord or letting agent receives the holding deposit,” so if the holding deposit is received on 3 July, the default deadline is 17 July, not 18 July. The parties can change that by written agreement, because the Act says the landlord or agent and tenant may agree in writing “that a different day is to be the deadline for agreement.” That answers how long a holding deposit lasts for a rented property and how long between holding deposit and tenancy agreement: the default statutory clock is 15 days including receipt day, not 15 days after. Wales has the same day-count. Scotland has no lawful holding period. Northern Ireland has no statutory day-count.

When can a landlord or agent keep a holding deposit?

In England, a landlord or agent can keep a holding deposit only on the statutory grounds, mainly where the applicant withdraws before the deadline, gives false or misleading information, fails Right to Rent, or fails to take reasonable steps to enter the tenancy. The withdrawal rule says repayment is not required if the tenant notifies the landlord or agent before the deadline that “the tenant has decided not to enter into a tenancy agreement.” The false-information rule applies where “the tenant provides false or misleading information,” and the Right to Rent ground applies where the landlord is prohibited by Immigration Act 2014 section 22 from granting the tenancy. Holding deposits are legally binding in this limited sense: paying one triggers statutory treatment rules, but it is not itself the tenancy agreement. A letting agent withdrawal fee is not the correct concept; the question is whether Schedule 2 allows retention of the holding deposit. Wales has similar withdrawal and false-information grounds but no Right to Rent keep-ground. Scotland permits no holding-deposit retention; Northern Ireland leaves retention to the agreed terms, with nidirect saying: “You'll lose this deposit if you pull out of the tenancy.”

Can a landlord take holding deposits from more than one applicant?

In England, a landlord or agent generally cannot take a second holding deposit for the same property while an earlier one is still live, but can take another after the earlier deposit has been repaid or lawfully retained. The Tenant Fees Act makes a later payment problematic where the landlord or agent “has previously received a holding deposit” for the same housing, and enforcement guidance explains that the bar does not apply if the first holding deposit has been repaid or lawfully retained. That is more precise than the common shorthand that you can never accept more than one holding deposit per tenancy at a time. In Wales, the Act defines a holding deposit as reserving “a right of first refusal,” and Welsh Government guidance says: “you may only accept one holding deposit for one tenancy at any one time,” although Wales does not copy England’s detailed earlier-deposit wording. In Scotland, a landlord cannot take even one holding deposit. In Northern Ireland, no statute fixes how many holding deposits can be taken, so the risk is contractual and reputational rather than a Tenant Fees Act breach.

Who keeps the holding deposit, the landlord or the agent?

In England, whoever receives the holding deposit must deal with repayment or lawful retention; the Tenant Fees Act does not automatically award it to either the landlord or the agent. The statutory definition says a holding deposit may be paid to “a landlord or letting agent,” and Schedule 2 puts the repayment duty on “the person who received the holding deposit.” If an agent receives it, government client-money guidance says: “Where a tenant pays an agent a holding deposit to secure the tenancy of a property before the contract is signed, this is client money,” so the agent is not simply banking its own fee. If the tenancy goes ahead, the sum is usually repaid by crediting it against first rent or the tenancy deposit with consent. If it is lawfully retained, the Act governs the tenant-facing right to repayment but does not set the commercial split between landlord and agent; that should be in the agency terms. Wales uses the same recipient-based approach. Scotland allows neither landlord nor agent to keep a holding deposit. Northern Ireland has no statutory keeper rule.

Last reviewed September 2026.

Sources

• Tenant Fees Act 2019 Schedule 1, paragraph 3 — “In this Act ‘holding deposit’ means money which is paid by or on behalf of a tenant to a landlord or letting agent before the grant of a tenancy with the intention that it should be dealt with by the landlord or letting agent in accordance with Schedule 2 (treatment of holding deposit).” Source
• GOV.UK, fees landlords and agents can charge — “You can ask a potential tenant to pay a deposit to hold the property while you undertake reference and pre-tenancy checks.” Source
• Renting Homes (Fees etc.) (Wales) Act 2019 Schedule 1 — “(b)is paid for the purpose of reserving a right of first refusal in relation to the granting of the contract, subject to suitability checks to be carried out as to the prospective contract-holder and agreement between the parties to enter into the contract;” Source
• Scottish Government, Letting Agent Code of Practice — “In particular you must comply with section 82 of the Rent (Scotland) Act 1984(6), which prohibits any person, as a condition of the grant, renewal or continuance of an assured or short assured tenancy or private residential tenancy, from requiring a tenant or prospective tenant to pay any charges except rent and a refundable deposit of no more than two months' rent.” Source
• nidirect, tenancy deposit scheme information — “By paying a holding deposit, you confirm your intention to rent.” Source
• GOV.UK, tenancy deposit protection — “Your landlord does not have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed).” Source
• Housing Act 2004 section 213 — “Any tenancy deposit paid to a person in connection with an assured tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.” Source
• Tenant Fees Act 2019 Schedule 2 — “If all or part of the amount of the deposit is applied in accordance with paragraph 6(b), the amount applied is treated for the purposes of section 213 of the Housing Act 2004 (requirements in connection with deposits) as having been received by the landlord on the date of the tenancy agreement.” Source
• Tenant Fees Act 2019 Schedule 1 — “(a)the amount of five weeks' rent, where the annual rent in respect of the tenancy immediately after its grant, renewal or continuance is less than £50,000, or” Source
• Housing Rights, taking deposits — “A holding deposit is not a tenancy deposit and doesn’t need to be protected.” Source
• Tenant Fees Act 2019 Schedule 1, holding deposit — “If the amount of the holding deposit exceeds one week's rent, the amount of the excess is a prohibited payment.” Source
• Tenant Fees Act 2019 Schedule 1, holding deposit — “In sub-paragraph (3) ‘one week's rent’ means the amount of the annual rent payable in respect of the tenancy immediately after its grant, renewal or continuance divided by 52.” Source
• Renting Homes (Fees etc.) (Wales) Act 2019 Schedule 1 — “(c)does not exceed an amount equivalent to one week's rent under the contract.” Source
• Welsh Government, letting fees guidance — “If you charge rent monthly, a simple calculation is to divide the monthly amount by 4.35.” Source
• Department for Communities Northern Ireland, Private Tenancies Act guidance — “A landlord cannot ask for or retain a tenancy deposit that is more than one month’s rent.” Source
• Tenant Fees Act 2019 Schedule 2 — “In this Schedule ‘the deadline for agreement’ means the fifteenth day of the period beginning with the day on which the landlord or letting agent receives the holding deposit.” Source
• Tenant Fees Act 2019 Schedule 2 — “But the landlord or the letting agent may agree with the tenant in writing that a different day is to be the deadline for agreement for the purposes of this Schedule.” Source
• OpenRent, deadline for agreement — “Example: If a tenant pays a holding deposit on 3 July then the deadline for agreement would be 18 July.” Source
• Renting Homes (Fees etc.) (Wales) Act 2019 Schedule 2 — “In this Schedule, the ‘deadline for agreement’ means the fifteenth day of the period beginning with the day on which the holding deposit is paid.” Source
• Tenant Fees Act 2019 Schedule 2 — “Subject to paragraph 13, paragraph 3(c) does not apply if the tenant notifies the landlord or letting agent before the deadline for agreement that the tenant has decided not to enter into a tenancy agreement.” Source
• Tenant Fees Act 2019 Schedule 2 — “Paragraph 3(b) or (c) does not apply if the tenant provides false or misleading information to the landlord or letting agent and—” Source
• Tenant Fees Act 2019 Schedule 2 — “(a)the landlord is prohibited by section 22 of the Immigration Act 2014 (persons disqualified by immigration status) from granting a tenancy of the housing to the tenant,” Source
• Renting Homes (Fees etc.) (Wales) Act 2019 Schedule 2 — “Paragraph 3(b) does not apply if the contract-holder notifies the landlord or letting agent before the deadline for agreement that the contract-holder has decided not to enter into a contract.” Source
• nidirect, tenancy deposit scheme information — “You'll lose this deposit if you pull out of the tenancy.” Source
• Tenant Fees Act 2019 Schedule 1, paragraph 3 — “(a)the landlord or letting agent to whom the deposit was paid has previously received a holding deposit (‘the earlier deposit’) in relation to the same housing,” Source
• GOV.UK, Tenant Fees Act statutory guidance for enforcement authorities — “This would not apply if the first holding deposit has been repaid unless the earlier deposit was lawfully retained under schedule 2.” Source
• Welsh Government, letting fees guidance — “A holding deposit confers the right of first refusal on a property to a tenant, so you may only accept one holding deposit for one tenancy at any one time.” Source
• Tenant Fees Act 2019 Schedule 2 — “Subject as follows, the person who received the holding deposit must repay it if—” Source
• GOV.UK, client money protection enforcement guidance — “Where a tenant pays an agent a holding deposit to secure the tenancy of a property before the contract is signed, this is client money.” Source