Holding deposits: the one-week cap, the 15-day deadline and when an agent can keep it

A holding deposit in England is capped at one week's rent, you can only hold one per property at a time, and by default the tenancy agreement must be signed within 15 days of the money arriving. If the let does not go ahead, the money goes back within 7 days, unless one of four specific reasons applies and you have given them to the applicant in writing.

Those rules come from the Tenant Fees Act 2019 and the statutory guidance that goes with it, which the government reissued on 1 May 2026 alongside the Renters' Rights Act changes. A holding deposit reserves a property while you run referencing and Right to Rent checks; it is a permitted payment, and also the one agencies most often get wrong, because the timing and refund rules are precise and the applicant can complain to the council. This guide sets out how to take, hold, refund and, where allowed, keep one. Checked against gov.uk on 31 October 2026.

The rules at a glance

A holding deposit is not a tenancy deposit and does not need to be protected in a scheme while it is a holding deposit. If the tenancy goes ahead and the money is put towards the tenancy deposit, it becomes part of that deposit and the 30-day protection clock runs from then. See tenancy deposit protection rules.

The one-week cap, and one at a time

The cap is one week's rent. To work it out from a monthly rent, multiply by 12 and divide by 52: on £1,300 a month, one week is £300. Our free deposit cap calculator works out both the holding deposit cap and the five- or six-week tenancy deposit cap from the agreed rent.

The cap applies to the property as a whole. gov.uk's example is three joint tenants sharing a £240 weekly rent: the most that can be taken in total is £240, and you cannot ask each applicant for £240. Anything over one week's rent is a prohibited payment and must be repaid.

You must not take a second holding deposit for the same property while you are holding a first one, unless the first has been repaid or was lawfully kept under the rules below. A waiting applicant cannot hold their place with money. Record the date and time each holding deposit arrives so there is no doubt which came first.

The 15-day deadline for agreement

The default deadline for agreement is 15 days starting with the day the holding deposit is received. By that date the tenancy agreement should be signed. You and the applicant can agree a longer or shorter deadline, but only in writing. If referencing routinely takes longer than two weeks, agreeing a realistic date up front, in the holding deposit receipt, avoids an argument later.

Put the deadline, the amount, the property, the rent it is based on and what happens to the money in each outcome into one written receipt sent to the applicant on the day of payment. That receipt is also your evidence if the applicant later complains.

When it must be refunded, and how fast

The holding deposit must be repaid within 7 days of whichever of these happens:

• the tenancy agreement is signed (unless the applicant agrees for the money to go towards the first rent or the tenancy deposit)
• the landlord decides not to go ahead with the tenancy
• the deadline for agreement passes without the agreement being signed, and the applicant was not at fault

Missing the 7 days is itself a breach, even if the money is eventually returned. Pay it back to the account it came from and keep the bank record against the applicant.

The four reasons you can keep it

The statutory guidance allows the landlord or agent to keep the holding deposit only where the applicant:

1. fails a Right to Rent check, meaning they have no right to rent in England
2. gives false or misleading information, where the landlord was reasonably entitled to rely on it and it affected the decision to let
3. withdraws from the application
4. does not take all reasonable steps to sign the agreement by the deadline, when the landlord and agent have taken all reasonable steps themselves

The false information ground is narrower than many agencies assume. gov.uk's examples of information that would not justify keeping the money are a misspelt name or a previous address left off the form where neither affected the applicant's suitability. An unaffordable rent that comes to light from a fair referencing process is a reason to decline the let, which triggers a refund, rather than a reason to keep the money, unless the applicant actively misstated their income.

Whichever reason applies, you must give it to the applicant in writing within 7 days of the decision not to let or the deadline passing. If you do not, the money has to be refunded. A short letter or email stating the ground, the facts behind it and the amount kept is enough. For Right to Rent failures, see our Right to Rent guide for what counts as a failed check.

Penalties

Breaches of the holding deposit rules are civil breaches enforced by the local council or trading standards. The maximum financial penalty is £5,000, and a repeat breach within five years of a previous penalty attracts a further penalty of up to £5,000. Unlike charging a prohibited fee, a repeat holding deposit breach is not a criminal offence and is not a banning order offence.

Taking more than one week's rent is treated differently, because the excess is a prohibited payment. A first breach carries a penalty of up to £5,000; a repeat within five years is a criminal offence, with a penalty of up to £30,000 or prosecution and an unlimited fine. The full list of permitted payments and the penalties is in our guide to the Tenant Fees Act.

Holding deposits sit alongside the asking-rent rules: you must advertise an asking rent and cannot accept offers above it. See advertising a let after 1 May 2026.

A checklist for agencies

1. Work out one week's rent from the agreed asking rent and never take more.
2. Check no holding deposit is already held on the property.
3. Send a written receipt on the day: amount, property, rent basis, the deadline for agreement, and what happens in each outcome.
4. Run Right to Rent and referencing promptly; agree any longer deadline in writing before the 15 days run out.
5. If the let falls through, refund within 7 days unless one of the four grounds applies.
6. If you keep the money, give the reason in writing within 7 days and keep a copy.
7. If the let goes ahead, get the applicant's agreement to put the money towards the deposit or first rent, and treat it as a tenancy deposit from the day the tenancy starts.

How Letfold helps

Letfold's move-in payment requests cover the holding deposit, the tenancy deposit and the first rent on each new tenancy, with a unique payment reference for each so that incoming bank lines match the right request. The holding deposit amount and the date the deposit was received are recorded on the tenancy, so the 15-day and 30-day clocks are visible to everyone in the office. See tenancies and rent.

Frequently asked questions

How much can a letting agent take as a holding deposit?

No more than one week's rent for the property. The cap applies to the whole property, so joint tenants share one holding deposit rather than paying one each.

How long can a holding deposit be held?

By default, 15 days from the day it is received, which is the deadline for signing the tenancy agreement. A longer or shorter deadline can be agreed with the applicant in writing.

When does a holding deposit have to be refunded?

Within 7 days of the tenancy agreement being signed, the landlord deciding not to let, or the deadline for agreement passing without the applicant being at fault.

Can a landlord keep a holding deposit if the tenant fails referencing?

Only if one of the four grounds applies: a failed Right to Rent check, false or misleading information that affected the decision, the applicant withdrawing, or the applicant not taking reasonable steps to sign in time. The reason must be given in writing within 7 days.

What is the penalty for mishandling a holding deposit?

A civil penalty of up to £5,000, with a further penalty of up to £5,000 for a repeat breach within five years. Taking more than one week's rent is a prohibited payment, where a repeat breach can be prosecuted or fined up to £30,000.

Sources

Checked on 31 October 2026:

• Tenant Fees Act 2019: statutory guidance for enforcement authorities (as amended by the Renters' Rights Act 2025) (gov.uk, updated 1 May 2026)
• Tenant Fees Act 2019: guidance for tenants (gov.uk)
• Assured tenancy agreements: a guide for landlords, rent in advance and deposits (gov.uk)
• Tenancy deposit protection (gov.uk)

This article is general information for England, not legal advice.