- A holding deposit is a payment of up to one week's rent that reserves a property while the landlord or letting agent runs checks on you. In England, that one-week cap is set by law.
- If the tenancy goes ahead, the holding deposit is normally put towards your first month's rent or your tenancy deposit. If the landlord decides not to go ahead, you should get it back within seven days.
- A landlord can only keep it in a few specific situations, and failing referencing or not having a guarantor isn't automatically one of them. If you've been asked for a UK guarantor you don't have, Rentmigo may be able to act as your guarantor so the tenancy can go ahead.
You've found a flat you want, and the letting agent has asked for a week's rent to take it off the market. That's normally a few hundred pounds, handed over before you've signed anything or been told whether your application has passed.
So it makes sense to want to know what that money is for, and what could stop you getting it back, especially if you are new to the UK.
This guide covers the rules in England, where holding deposits are controlled by the Tenant Fees Act 2019 and sit alongside the changes brought in by the Renters' Rights Act 2025. Scotland, Wales and Northern Ireland each have their own rules.
A holding deposit is often paid at the same time the agent starts referencing, which is also when many renters are first told they need a UK guarantor. If that's where you are, and you don't have a friend or relative who meets the agent's criteria, Rentmigo can act as your guarantor if you're approved. Check whether you're eligible before the agent's deadline starts to feel tight.
What is a holding deposit?
A holding deposit is money you pay a landlord or letting agent to take a property off the market before you sign a tenancy agreement. While they hold it, they agree not to take the property to anyone else, and they use that time to run their checks on you.
Those checks are called referencing. The agent looks at things like your income, your credit history, references from a previous landlord or employer, and whether you can afford the rent.
In England, they also have to carry out a Right to Rent check. This is a legal check that you have the immigration status to rent a home in England, and it applies to everyone, including British citizens.
A holding deposit is not a fee. It's your money, and the GOV.UK guidance for tenants describes it as refundable. It's also not the same as the tenancy deposit you pay if the tenancy goes ahead, which we explain below.
Before you pay, ask for the terms in writing. That should include the amount, the rent you've agreed, the date by which the tenancy should be agreed and the situations where you might not get the money back.
How much can a landlord ask for as a holding deposit?
In England, a landlord or letting agent can't ask for more than one week's rent as a holding deposit. Anything above that counts as a banned payment under the Tenant Fees Act 2019, and you can ask for the extra back.
To work out a week's rent from a monthly figure, multiply the monthly rent by 12 and divide by 52.
For example, if the rent is £1,300 a month, that's £15,600 a year, so the most the agent could take as a holding deposit is £300.
A few other limits are worth knowing:
- One holding deposit at a time: A landlord or agent can't take another holding deposit for the same property while yours is still being held.
- Joint tenancies: If you're renting with friends, the one-week limit applies to the tenancy as a whole, not to each person. Four housemates can't each be asked for a week's rent.
- Optional, not compulsory: The law caps the amount but doesn't say landlords have to take a holding deposit, so some won't ask for one, though most do.
Holding deposit, tenancy deposit and rent in advance: what's the difference?
These are three separate payments with different jobs and different limits, and agents don't always explain which is which. Here's how they compare in England.
A holding deposit
Reserves the property while the landlord or agent runs their checks. You pay it before the tenancy agreement is signed, it's capped at one week's rent, and it doesn't go into a deposit protection scheme. You'll normally get it back within seven days, either as a refund or by having it put towards your rent or tenancy deposit.
A tenancy deposit
Is security for the landlord against unpaid rent or damage while you live in the property. You pay it once the tenancy is agreed, and it's capped at five weeks' rent if the annual rent is under £50,000, or six weeks' rent if the annual rent is between £50,000 and £100,000. Your landlord must protect it in a government-approved scheme, and you get it back at the end of the tenancy, minus any agreed deductions.
Rent in advance
A payment for the first period you live in the property, so you don't get it back. A landlord can only ask for it after the tenancy agreement has been signed, and can't ask for more than one month's rent.
The one-month rent in advance limit is one of the bigger recent changes under the Renters' Rights Act 2025.
That matters if you've been used to hearing about international renters paying six or twelve months' rent upfront to avoid needing a guarantor. That's no longer something a landlord can ask for in England, which is one reason more landlords now ask for a guarantor instead.
We look at this in more detail in our guide to how the Renters' Rights Act affects international tenants.
How long does the landlord have to agree the tenancy?
The default is 15 days, starting on the day the landlord or agent receives your holding deposit. The law calls this the "deadline for agreement".
You and the landlord can agree a different date, but it has to be agreed in writing by both of you. An agent can't extend it on their own.
The 15 days aren't a promise that you'll have signed a tenancy agreement by then. They're the window the law uses to decide what happens to your money if things don't go ahead.
Everything that needs to happen before you sign has to fit inside that window. That means referencing, your Right to Rent check and, if the agent asks for one, setting up a guarantor. If you're waiting on paperwork from abroad or still looking for someone who can guarantee your rent, 15 days can go quickly.
When do you get your holding deposit back?
In most cases, you get it back within seven days. When those seven days start depends on how things end, and "back" can mean either a refund or having the money put towards what you owe.
If the tenancy goes ahead
The holding deposit is usually put towards your first month's rent or your tenancy deposit, as long as you agree to that. If it isn't used that way, the landlord has seven days from the date the tenancy agreement is entered into to refund it.
If the landlord decides not to go ahead
You should get the full amount back within seven days of the landlord making that decision. That includes situations where they choose another tenant or are unhappy with your references, as long as the information you gave them was honest.
If the deadline passes without a tenancy being agreed
If the 15 days, or the different date you agreed in writing, run out and no tenancy has been agreed, the landlord has seven days from that deadline to refund you.
However, there are a few exceptions...
When can a landlord keep your holding deposit?
In England, a landlord or agent can only keep your holding deposit in four situations set out in the Tenant Fees Act. In plain terms, these are when:
You fail a Right to Rent check: This applies where you don't have the immigration status to rent in England and the landlord has followed the legal rules for the check.
You pull out: If you tell the landlord or agent before the deadline that you no longer want the tenancy, they can keep it.
You gave false or misleading information: This has to be something that affected their decision to rent to you, like saying you earn more than you do. A small mistake isn't normally enough.
You didn't take reasonable steps to agree the tenancy: This applies where the landlord and agent did everything to get the tenancy agreed before the deadline, but you didn't.
If they keep your money, they have to tell you why in writing within seven days. If they don't, Shelter's guidance says you have the right to a full refund, whatever the reason.
The landlord's own behaviour matters too. If they or the agent act in a way that makes it unreasonable for you to go ahead, like asking for banned fees or treating you in a discriminatory way, they shouldn't keep your deposit even if you're the one who walks away.
Since 1 May 2026, the Renters' Rights Act has also made it unlawful in England to refuse a tenant just because they receive benefits or have children. A landlord can't use a refusal like that as a reason to keep your holding deposit, although they can still run fair affordability checks that treat benefits as income.
Do you get your holding deposit back if you fail referencing?
Usually, yes. If you were honest about your situation and the landlord decides not to go ahead because you didn't pass their credit, income or reference checks, you should normally get your holding deposit back.
Where people run into trouble is the difference between failing a check and giving information that turns out to be wrong. If you said you earned £40,000 and your payslips show £28,000, that could count as misleading information. If you said £28,000 from the start and the agent decided that wasn't enough, it shouldn't.
What can you do if the landlord won't return your holding deposit?
Start by asking for it back in writing. Say how much you paid, when, which property it was for and why the tenancy didn't go ahead, and point out the seven-day rule.
If that doesn't work, there are a few main routes in England.
Your local council's Trading Standards team enforces the Tenant Fees Act. It can investigate and fine a landlord or agent up to £5,000 for a breach.
The First-tier Tribunal can order a landlord or agent to repay a holding deposit that was kept unlawfully.
Every letting agent must belong to a redress scheme. You can complain to the agent's scheme, which can look into what happened and may tell the agent to pay you compensation.
Depending on your situation, you may also be able to claim the money back yourself through the county court.
Paid a holding deposit and been asked for a guarantor?
If you've paid a holding deposit for a property you love and been told you need a guarantor to secure it, tell the agent straight away that you're working on it, and find out exactly what they need before the deadline runs out.
Showing you're taking reasonable steps protects your position, and it keeps the property from slipping away while you sort things out.
If you have a friend or relative in the UK who meets the agent's requirements and is happy to take on that responsibility, ask them early so their own checks have time to go through.
If you don't, Rentmigo can act as your guarantor instead. You apply online, we check that the rent is affordable for you using your income, savings, student finance or family support, and if you're approved we become your guarantor. The fee is paid once, is never more than one month's rent and covers up to three years at the same property.
It's still worth checking first that your landlord or agent accepts professional guarantors. If they do, start your Rentmigo application, so a missing guarantor doesn't cost you the flat or your holding deposit.
