In England a holding deposit is capped at one week's rent (annual rent divided by 52); the tenancy must be agreed before the 15th day beginning with receipt, and the money repaid within 7 days unless a Schedule 2 exception applies (Right to Rent bar, false information, withdrawal, no reasonable steps) and written reasons are given within 7 days.
By Stevie Hayes · Updated 26 October 2026 · Figures checked against legislation.gov.uk and GOV.UK on 26 October 2026 · How we verify · Report a problem with this page · Statutory penalties are maximums; councils and courts decide the amount.
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| Fact | Position | Since / status | Source |
|---|---|---|---|
| Cap | One week's rent: the annual rent immediately after the grant divided by 52; any excess is a prohibited payment | 1 June 2019 | Tenant Fees Act 2019, Schedule 1 (permitted payments: rent, tenancy deposits, holding deposits) |
| Deadline for agreement | The fifteenth day of the period beginning with the day of receipt (receipt + 14), unless a different day is agreed in writing | Sch 2 para 2 | Tenant Fees Act 2019, Schedule 2 (treatment of holding deposit) |
| Repayment | Within 7 days beginning with the tenancy agreement, the decision not to proceed, or the deadline for agreement | Sch 2 paras 3–4 | Tenant Fees Act 2019, Schedule 2 (treatment of holding deposit) |
| Keeping it | Only for a failed Right to Rent the landlord could not have known of, false or misleading information, withdrawal, or no reasonable steps by the tenant | Sch 2 paras 8–12 | Tenant Fees Act 2019, Schedule 2 (treatment of holding deposit) |
| Written reasons | A notice in writing explaining why, within 7 days beginning with the decision or the deadline; otherwise the deposit must be repaid | Sch 2 para 5 | Tenant Fees Act 2019, Schedule 2 (treatment of holding deposit) |
| One at a time | A second holding deposit on the same housing is a prohibited payment while the first is unrepaid and no exception applies | Sch 1 para 3(5) | Tenant Fees Act 2019, Schedule 1 (permitted payments: rent, tenancy deposits, holding deposits) |
| Penalty | Failure to repay: up to £5,000 per breach (s.8(2)). Up to £30,000 or prosecution only for a repeat s.1 or s.2 breach (s.12), e.g. an over-cap deposit | s.8(2), (3) | Tenant Fees Act 2019 s.8 (financial penalties) |
| Rent before signing | No rent may be taken before a private assured tenancy is entered into; the holding deposit is the only payment that reserves the property | 1 May 2026 | Renters' Rights Act 2025 s.9 (rent in advance: amendments to the Tenant Fees Act 2019) |
A landlord in England may take one holding deposit of up to one week's rent to reserve a property, must sign the tenancy or decide against it before the fifteenth day beginning with receipt, must repay within the period of seven days beginning with the signing, the decision or the deadline, and may keep the money only in four narrow cases set out in Schedule 2 to the Tenant Fees Act 2019, with written reasons.
The Tenant Fees Act 2019, Schedule 1, paragraph 3(2) defines a holding deposit as "money which is paid by or on behalf of a tenant to a landlord or letting agent before the grant of a tenancy with the intention that it should be dealt with by the landlord or letting agent in accordance with Schedule 2". It is one of the few payments a landlord in England may ask a tenant for: under section 1 a landlord "must not require a relevant person to make a prohibited payment", and under section 3(1) "a payment is a prohibited payment unless it is a permitted payment by virtue of Schedule 1".
The cap is one week's rent. Paragraph 3(3) says that "if the amount of the holding deposit exceeds one week's rent, the amount of the excess is a prohibited payment", and paragraph 3(4) fixes the arithmetic: one week's rent "means the amount of the annual rent payable in respect of the tenancy immediately after its grant, renewal or continuance divided by 52". In figures: monthly rent multiplied by twelve, then divided by 52, not monthly rent divided by four. A letting at 1,300 a month has an annual rent of 15,600 and a maximum holding deposit of 300 (all in pounds).
One at a time. Paragraph 3(5) makes a second holding deposit on the same housing a prohibited payment where the landlord or agent "has previously received a holding deposit" for it, "has not repaid all or part of the earlier deposit", and none of the Schedule 2 exceptions let them keep it. Taking deposits from two applicants for the same property and holding both breaks this rule. The cap is also one week's rent in total per tenancy, not per sharer: paragraph 3(4) works from "the annual rent payable in respect of the tenancy", and GOV.UK puts it as "per tenancy not the number of tenants".
This guide describes the law in England; it is not advice on a particular letting. The landlord compliance checklist places the holding deposit among the other pre-tenancy duties.
Until the deadline for agreement, which the Act fixes as the fifteenth day of the period beginning with the day the money is received: receipt plus fourteen days. The tenancy must be entered into, or the landlord must decide not to proceed, before that day, so the last day to sign is receipt plus thirteen; the seven-day repayment clock then runs. A different date can be agreed with the tenant in writing.
Schedule 2, paragraph 2(1) says the deadline for agreement "means the fifteenth day of the period beginning with the day on which the landlord or letting agent receives the holding deposit". The day of receipt is day one, so the deadline is the day of receipt plus fourteen. Money received on Monday 2 November 2026 gives a deadline for agreement of Monday 16 November 2026. The Act requires the agreement, or the landlord's decision, to come before that day (paragraphs 3(b) and 3(c) both say "before the deadline for agreement"), so treat Sunday 15 November as the last day to sign.
GOV.UK's guidance for landlords puts the same rule as "15 calendar days after receiving it"; the statutory count above is the one that fixes the sign-by day. Paragraph 2(2) allows a different date: the landlord or agent "may agree with the tenant in writing that a different day is to be the deadline for agreement". An email exchange agreed by both sides is the usual way to record it.
The clock starts on receipt of the money, not on the application or the offer. If the money reaches you on a Friday evening the period begins that Friday.
Within the period of seven days beginning with whichever comes first: the tenancy agreement being signed, the landlord deciding not to proceed, or the deadline for agreement passing without an agreement. Counting the first day, the last day to repay is the trigger date plus six. With the tenant's consent the money can instead go towards the first rent or the tenancy deposit.
Paragraph 3 of Schedule 2 sets three triggers. The person who received the deposit "must repay it if" (a) "the landlord and the tenant enter into a tenancy agreement relating to the housing", (b) "the landlord decides before the deadline for agreement not to enter into a tenancy agreement", or (c) "the landlord and the tenant fail to enter into a tenancy agreement relating to the housing before the deadline for agreement".
Paragraph 4 gives seven days for each, again counted from the first day: the deposit "must be repaid within the period of 7 days beginning with" the date of the tenancy agreement, the date of the landlord's decision, or the deadline for agreement.
| Step | Day | Example: deposit received Monday 2 November 2026 | Provision |
|---|---|---|---|
| Holding deposit received | Day 1 of the period | Monday 2 November 2026 | Sch 2 para 2(1) |
| Last day to sign or decide | Receipt + 13: the agreement or the decision must come before the deadline for agreement | Sunday 15 November 2026 | Sch 2 paras 3(b), 3(c) |
| Deadline for agreement | The fifteenth day: receipt + 14 | Monday 16 November 2026 | Sch 2 para 2(1) |
| Tenancy agreement signed | Repay by the date of the agreement + 6 | Signed 10 November: repay (or apply with consent) by 16 November | Sch 2 paras 3(a), 4(a), 6 |
| Landlord decides not to proceed | Repay by the date of the decision + 6; written reasons by the same day if keeping it | Decided 9 November: repay by 15 November | Sch 2 paras 3(b), 4(b), 5 |
| No agreement by the deadline | Repay by the deadline + 6 (receipt + 20); written reasons by the same day if keeping it | Repay by Sunday 22 November 2026 | Sch 2 paras 3(c), 4(c), 5 |
Where the tenancy goes ahead, the money need not come back as cash. Paragraph 6 disapplies the repayment duty "if or to the extent that the amount of the deposit is applied, with the consent of the person by whom it was paid", towards "the first payment of rent under the tenancy" or "the payment of the tenancy deposit". Consent is the operative word. If it goes towards the tenancy deposit, paragraph 7 treats that amount "as having been received by the landlord on the date of the tenancy agreement" for the 30-day protection clock in section 213 of the Housing Act 2004, so protection runs from signing, not from the day the holding deposit first arrived.
Only in four cases: the tenant failed a Right to Rent check the landlord could not reasonably have known about, gave false or misleading information the landlord is reasonably entitled to take into account, withdrew before the deadline for agreement, or failed to take all reasonable steps to sign while the landlord took all of theirs. In each case the landlord must also give written reasons within seven days.
Schedule 2 lists the only circumstances in which the repayment duty under paragraph 3(b) or (c) does not apply. Each is narrow, and each is lost if the landlord has behaved badly first.
Paragraph 13 removes the withdrawal and reasonable-steps exceptions where, before the deadline, the landlord or agent "breaches section 1 or 2 by imposing a requirement" (asking for a prohibited fee) or "behaves towards the tenant ... in such a way that it would be unreasonable to expect the tenant to enter into a tenancy agreement with the landlord". A landlord who asks for an admin fee after taking the deposit has breached section 1 (paragraph 13(a)); one who changes the terms in a way that makes it unreasonable to expect the tenant to sign falls under paragraph 13(b). Either is likely to lose the withdrawal and reasonable-steps exceptions when the applicant walks away.
Keeping it also needs a letter. Under paragraph 5, a landlord who believes an exception applies "must repay it" anyway if they do "not give the person who paid the deposit a notice in writing within the relevant period explaining why" they intend not to repay. The relevant period is 7 days beginning with the date of the decision not to proceed, or 7 days beginning with the deadline for agreement. No written reasons in time, no retention.
A failure to repay is a breach of Schedule 2, capped at £5,000 per breach under section 8(2) of the Tenant Fees Act 2019 and imposed by the local council. The higher £30,000 penalty and prosecution under section 12 apply to repeat breaches of section 1 or 2 within five years, such as taking more than one week's rent or a second holding deposit, and a section 12 offence is a banning order offence. The tenant can recover an unrepaid holding deposit through the First-tier Tribunal.
Under section 6 it is "the duty of every local weights and measures authority in England" to enforce the Act in its area, including Schedule 2. In practice that is the council's trading standards service; a district council that is not a weights and measures authority may also enforce (section 7). Under section 8, where the authority "is satisfied beyond reasonable doubt that a person has breached section 1, 2 or 5A or Schedule 2" it "may impose a financial penalty", which "must not exceed £5,000". Where the authority is satisfied the person has committed an offence under section 12, a breach of section 1 or 2 within five years of a previous penalty or conviction for the same section, the penalty "may exceed £5,000, but must not exceed £30,000"; prosecution instead carries a fine on summary conviction and, under section 12(6), is a banning order offence.
The money comes back as well. Under section 10(6) to (8), when it imposes a penalty for a Schedule 2 breach the authority may require the landlord to pay the tenant the holding deposit, or the part of it, that "has not been repaid", and under section 15(2) and (3) a tenant whose holding deposit "has not been repaid" may apply to the First-tier Tribunal for its recovery, less any part applied with consent to rent or the tenancy deposit. Section 8(5) prevents a penalty, but not an order to repay (section 10(7)), where the landlord kept the deposit believing a Right to Rent prohibition applied and "the person's belief was based on incorrect information provided by the Secretary of State", in practice the Home Office.
Section 17, which barred a section 21 notice while a prohibited payment or holding deposit was unrepaid, was omitted from 1 May 2026 for assured tenancies that are not social housing (Renters' Rights Act 2025, s.27(2), commenced by SI 2026/421). Section 21 itself no longer exists for those tenancies (save for notices given before that date, Renters' Rights Act 2025 Sch 6 paras 3–4), so the lever has gone with it; the penalty, the tribunal and the banning order remain.
Nothing in the holding deposit rules themselves, but since 1 May 2026 a payment of rent before a private assured tenancy is entered into is a prohibited payment, and a landlord must not invite, encourage or accept one. No rent may be taken before signing; the holding deposit, capped at one week's rent, is the only payment that reserves the property.
The holding deposit rules in Schedule 2 are unchanged. What changed is the money around them. Section 9 of the Renters' Rights Act 2025 inserted paragraph 1(1A) into Schedule 1: "a payment of rent is a prohibited payment if it is payable before the tenancy is entered into, and the tenancy is an assured tenancy". It also inserted section 5A, under which a landlord "must not invite or encourage", "accept an offer" of, or "accept" a prohibited pre-tenancy payment of rent, and extended the section 8 penalty, section 10 recovery and section 15 tribunal route to breaches of section 5A. These provisions came into force on 1 May 2026 for assured tenancies that are not social housing (SI 2026/421, regulation 2(a)).
So no rent may be taken before signing, and the holding deposit of up to one week's rent is the only payment that reserves the property. The rent itself is governed by section 4B of the Housing Act 1988, inserted by the Renters' Rights Act 2025 s.8 from the same date: terms of an assured tenancy "are of no effect so far as they provide for rent to be due in advance", except "initial rent" due during the "permitted pre-tenancy period", the time between entering into the tenancy and the day before it starts; section 4B(8) points to Schedule 2 of the Tenant Fees Act for using a holding deposit towards that initial rent. GOV.UK's guidance states that "from 1 May 2026, you cannot ask for a tenant to pay rent before the tenancy agreement is signed", that an offer of early rent must not be accepted, and that after signing a landlord can ask for up to one month's rent in advance before the start date. The holding deposit may still be applied to the first rent payment with the tenant's consent under paragraph 6, because that happens once the agreement exists. The tenancy agreement guide covers what the written agreement itself must now contain.
Government changes that bear on this duty. Where the status says in force the rule already applies; everything else is not yet law for private landlords. Dates are quoted as the government has published them, checked on 15 October 2026.
| Change | Status today | Published timing | Sensible preparation |
|---|---|---|---|
| Mandatory membership of a Private Rented Sector Landlord Ombudsman scheme | announced, dates to be confirmed | Government roadmap: landlords required to join "in 2028", after the Database launches; scheme conditions set during Phase 2 from 2026 | Keep a written complaints process and records of how tenant complaints were handled; the scheme will expect both. Source |
Up to one week's rent, which the Tenant Fees Act 2019 defines as the annual rent immediately after the grant of the tenancy divided by 52 (Schedule 1, paragraph 3(3) and (4)). Anything above that is a prohibited payment. In figures, monthly rent times twelve divided by 52: a letting at 1,300 a month gives a cap of 300, in pounds.
Only in the four cases in Schedule 2 to the Tenant Fees Act 2019: a failed Right to Rent check the landlord could not reasonably have known about, false or misleading information, the tenant withdrawing before the deadline for agreement, or the tenant failing to take reasonable steps. Written reasons must follow within 7 days, and a landlord who asked for a prohibited fee first loses the last two exceptions.
Until the deadline for agreement: the fifteenth day of the period beginning with the day the deposit was received, so receipt plus 14 days (Schedule 2, paragraph 2(1)). A different day can be agreed with the tenant in writing (paragraph 2(2)). Once a trigger in paragraph 3 occurs the money must be repaid within 7 days beginning with that trigger.
Within the period of 7 days beginning with the date of the tenancy agreement, the date the landlord decides not to proceed, or the deadline for agreement if no agreement is reached (Schedule 2, paragraph 4). Counting the first day, that is the trigger date plus 6. With the tenant's consent it can instead be applied to the first rent or the tenancy deposit (paragraph 6).
Yes, with the consent of the person who paid it (Schedule 2, paragraph 6). If it goes towards the tenancy deposit, paragraph 7 treats that amount as received on the date of the tenancy agreement, so the 30-day protection clock under section 213 of the Housing Act 2004 runs from signing.
No. Under Schedule 1, paragraph 3(5), a holding deposit is not a permitted payment where the landlord or agent has already received one for the same housing, has not repaid it, and no Schedule 2 exception lets them keep it. Resolve the first before taking the second.
The landlord may keep it if section 22 of the Immigration Act 2014 prohibits the letting and neither the landlord nor an instructed agent knew, or could reasonably have been expected to know, that before accepting the deposit (Tenant Fees Act 2019 Sch 2 para 8), with written reasons within 7 days. Section 8(5) prevents a penalty (but not an order to repay) where the landlord relied on incorrect information from the Secretary of State, in practice the Home Office.
A failure to repay is a breach of Schedule 2, capped at £5,000 per breach under Tenant Fees Act 2019 s.8(2) and imposed by the local council. The higher £30,000 penalty and prosecution under section 12 apply to repeat breaches of section 1 or 2, such as taking more than one week's rent or a second holding deposit. The tenant can recover the deposit through the First-tier Tribunal (s.15).
Not before the tenancy agreement is entered into: since 1 May 2026 that is a prohibited payment (Tenant Fees Act 2019 Sch 1 para 1(1A), inserted by the Renters' Rights Act 2025 s.9), and s.5A bars inviting or accepting it. On a tenancy entered into on or after 1 May 2026, Housing Act 1988 s.4B makes any term requiring rent in advance of no effect, apart from initial rent due between signing and the start date. GOV.UK says that after signing a landlord can ask for up to one month's rent in advance; see our rent in advance guide.
No. A holding deposit reserves the property before the tenancy and is capped at one week's rent under Schedule 1, paragraph 3. A tenancy deposit is security held during the tenancy, capped at five weeks' rent where the annual rent is under £50,000 (paragraph 2), and must be protected in a scheme within 30 days beginning with receipt (Housing Act 2004 s.213(3)). The tenancy deposit guide covers that clock.
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