Holding deposits
What is a holding deposit?
A holding deposit is money you pay to a landlord or letting agent to reserve a property before you sign a tenancy agreement.
The landlord must not show the property to anyone else if they take a holding deposit from you. It is sometimes called a holding fee.
A landlord or agent might take a holding deposit while they check things like:
your references
if you can pay the rent
your credit history
They can only take one holding deposit at a time.
A holding deposit is not the same as a tenancy deposit. You might pay a tenancy deposit if you go ahead with the tenancy.
How much is a holding deposit?
Landlords and agents cannot take more than it would cost for 1 week’s rent of the property.
You can work this out like this:
Monthly rent x 12 ÷ 52 = maximum holding deposit
Do you get your holding deposit back?
You should usually get all the money back if the landlord decides not to rent to you.
The landlord or agent might keep your holding deposit if you:
decide not to rent the property
give wrong information or tell them something that is false
do not pass a right to rent immigration check
They cannot keep your money for any other reason.
For example, you should get your holding deposit back if you fail a credit or reference check, as long as you give honest information and facts about your situation.
Find out how to get a holding deposit refund.
What happens when you pay a holding deposit?
You have 15 days to agree a tenancy with your new landlord or agent.
You and the landlord or agent can agree to a shorter or longer deadline for sorting out the tenancy in writing.
Do not pay a holding deposit without looking at the property.
Only pay it if you are serious about taking on the tenancy.
Last updated: 17 July 2024
