Home / Glossary / Holding deposit
What is Holding deposit?
Last verified 23 October 2026
A holding deposit is a refundable payment a prospective tenant makes to reserve a property while the landlord or agent carries out checks. In England it is capped at one week's rent under the Tenant Fees Act.
Why it matters to landlords
The parties have 15 days from when the deposit is received to sign the tenancy agreement, unless they agree a different deadline in writing. The landlord can keep the money only if the applicant fails a right to rent check, withdraws, does not take reasonable steps to sign, or gave false or misleading information that is relevant. Otherwise it must be refunded within 7 days of signing, of the landlord deciding not to let, or of the deadline passing. If any of it is kept, the landlord must give written reasons.
A holding deposit does not have to be protected in a deposit scheme while it is held, but it becomes a protected deposit once the applicant becomes a tenant. Mishandling a holding deposit can lead to a civil penalty from the local trading standards authority.
Example
A flat lets at £1,040 a month. That is £12,480 a year, or £240 a week, so the holding deposit can be no more than £240. The applicant passes the checks and signs within the deadline, and the landlord puts the £240 towards the first month's rent.