Paying a tenancy deposit

What is a tenancy deposit?

You usually pay a tenancy deposit before you move into a property. 

This is sometimes called a security deposit and can be used by the landlord to cover costs such as:

  • rent arrears 

  • damage to the property

With a joint tenancy you usually have to pay a single deposit for the whole tenancy between you.

The deposit is your money. It should be returned to you in full at the end of the tenancy unless your landlord has a reason to make deductions.

A tenancy deposit is different from a holding deposit which you pay to reserve a property.

How much you can be asked to pay

From 1 June 2019, the maximum tenancy deposit is equal to 5 weeks' rent.

How to calculate your maximum tenancy deposit:

Your monthly rent x 12 ÷ 52 x 5 = maximum tenancy deposit

This limit applies to deposits taken from all assured shorthold tenants, lodgers and students in halls of residence as long as the yearly rent is less than £50,000.

If you're overcharged you can complain to:

There was no limit on the amount that could be charged before 1 June 2019.

Deposit protection schemes

Your landlord or agent must protect your deposit with an authorised scheme if you have an assured shorthold tenancy. Most private renters have these.

There are 3 deposit protection scheme providers. Your landlord or agent can choose which scheme to use.

Each provider runs an insurance scheme and a custodial scheme.

Insurance schemes

The landlord or agent keeps the deposit during the tenancy.

You can tell the scheme if your deposit is not returned at the end of the tenancy or if you feel that unfair deductions have been made.

The scheme will then:

  • tell the landlord to pay the disputed amount into the scheme

  • provide a free dispute resolution service to decide how much you get back

You may have to claim your money back through court if you can't get in touch with your landlord or they refuse to pay the disputed amount in to the scheme.

Custodial schemes

The landlord or agent pays the deposit into the scheme when they receive it.

The scheme:

  • keeps the deposit during the tenancy

  • refunds your deposit at the end if your landlord agrees

If your landlord won't return your deposit or wants to make deductions, you can use the scheme's dispute resolution service to decide how much you get back.

You may be able to get your deposit back from the scheme without going to court if you can't get in touch with your landlord at the end of the tenancy.

If you can't afford a deposit

You may be able to get help with a deposit from a local rent deposit or bond scheme. These are usually run by councils or charities.

Council also have discretionary housing payments for some deposits and rent in advance. 

You need to claim housing benefit or universal credit housing costs to apply for a DHP.

Deposit replacement insurance

Some landlords or agents may suggest deposit replacement insurance, as an alternative to paying a tenancy deposit. This is sometimes called a zero deposit option.

It can mean paying less up front than you would with a normal tenancy deposit. However it can cost more if there are problems at the end of the tenancy.

How it works

You pay a non refundable fee at the start of the tenancy, often equivalent to one weeks' rent.

This is either to take out an insurance policy yourself or to cover your landlord's costs for doing so.

At the end of the tenancy, the landlord can make a claim through the insurance company if they want to charge you for anything like cleaning, damage or arrears.

The company will then chase you for the money they pay out to the landlord and can take you to court if you don't pay.

You may be able to dispute the charges with the company. You may have to pay a fee if they decide the landlord is right, or if they think you raised a dispute without a good reason.  

You cannot be forced to pay for deposit replacement insurance. The landlord can only offer it as an alternative to paying a deposit. If you were not given an option it may be considered a banned fee.


You can complain to a redress scheme if your letting agent

  • told you that you had to agree to deposit replacement insurance

  • didn't explain that you would still have to pay for anything normally covered by a deposit

You can also make a complaint to the insurance company. If the policy was in your name you may be able to escalate your complaint to the Financial Ombudsman Service.

Last updated: 23 September 2021

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