Can a landlord take a holding deposit and then give the property to someone else?

Not without refunding your holding deposit. If the landlord withdraws or rents to another tenant before the deadline for agreement expires, the holding deposit must be refunded in full within 7 days. Failure to refund is a prohibited payment and can be enforced through the First-tier Tribunal.

Can the landlord keep the holding deposit if I fail a credit check?

Only if the failure results from information you provided that was false or misleading. A straightforward failed credit check — where you provided accurate information that simply revealed an adverse credit history — does not entitle the landlord to retain the deposit. You should still receive a refund if you were honest throughout the application.

Does the holding deposit need to be protected in a deposit scheme?

No — the Housing Act 2004 deposit protection requirements apply only to tenancy deposits paid after the tenancy begins. A holding deposit paid before the tenancy commences is not a tenancy deposit and does not need to be protected in DPS, TDS, or MyDeposits.

Holding Deposit

By GetRighted Legal Research TeamLast updated July 2026

Summary

Paying a holding deposit reserves the property in your name while referencing and credit checks are completed. Under the Tenant Fees Act 2019 it is a permitted payment — but only up to one week's rent, and only for a maximum of 15 calendar days (the 'deadline for agreement'). If you pass referencing and proceed to sign the tenancy, the holding deposit must be applied to the first month's rent or the tenancy deposit. If the landlord withdraws or fails to meet the deadline, the holding deposit must be refunded in full. If you provide false information or withdraw without good reason, the landlord may retain it — but only with written justification.

What the Tenant Fees Act 2019 says about holding deposits

Schedule 1 paragraph 3 of the Tenant Fees Act 2019 defines a holding deposit as a permitted payment, capped at one week's rent (annual rent ÷ 52). The 'deadline for agreement' is 15 calendar days from payment unless the parties agree a longer period in writing. Within that window, the landlord must either enter the tenancy agreement or return the deposit. A holding deposit that is not refunded within the required period, or retained without written justification, becomes a prohibited payment — enforceable through the First-tier Tribunal.

Grounds on which a landlord can retain a holding deposit

The Tenant Fees Act 2019 s.5 and the associated guidance set out the limited grounds for retention: the tenant provides false or misleading information that materially affects the decision to let; the tenant fails a right to rent check; the tenant withdraws from the proposed tenancy; or the tenant fails to take all reasonable steps to enter into the tenancy before the deadline. The landlord must notify the tenant in writing of the reason for retention. Vague or undocumented reasons are not sufficient — and 'you seemed like a risky tenant' is not a lawful basis.

Keep evidence that you paid a holding deposit

Many holding deposit disputes arise because tenants cannot prove they paid. Always pay by bank transfer (not cash), with a clear reference such as 'holding deposit [property address]'. Retain the bank statement and any email receipt. If the landlord fails to return the deposit and has no lawful basis for retention, the payment reference and bank statement are your primary evidence before the First-tier Tribunal.

Protecting your holding deposit

✓Confirm the holding deposit amount does not exceed one week's rent (annual rent ÷ 52).
✓Get written confirmation of the deadline for agreement (default is 15 days from payment).
✓Pay by bank transfer with a clear payment reference.
✓Ask for a receipt confirming the property address, amount, and the deadline for agreement.
✓If the landlord does not proceed, request the refund in writing and note the basis for retention if claimed.

Holding deposit vs tenancy deposit — do not confuse them

A holding deposit is a pre-tenancy reservation payment, capped at one week's rent, governed by the Tenant Fees Act 2019, and not subject to the Housing Act 2004 deposit protection rules. A tenancy deposit is a payment received after the tenancy starts, capped at five weeks' rent, and must be protected in an authorised scheme within 30 days under Housing Act 2004 s.213. The two payments serve different purposes and are governed by entirely different legal regimes. If a landlord holds your holding deposit and then also takes a tenancy deposit that includes the holding deposit amount, verify the total does not exceed five weeks.

Sources

Tenant Fees Act 2019, s.3 and Schedule 1, para 3
Tenant Fees Act 2019, s.5

Frequently Asked Questions

Can a landlord take a holding deposit and then give the property to someone else?: Not without refunding your holding deposit. If the landlord withdraws or rents to another tenant before the deadline for agreement expires, the holding deposit must be refunded in full within 7 days. Failure to refund is a prohibited payment and can be enforced through the First-tier Tribunal.
Can the landlord keep the holding deposit if I fail a credit check?: Only if the failure results from information you provided that was false or misleading. A straightforward failed credit check — where you provided accurate information that simply revealed an adverse credit history — does not entitle the landlord to retain the deposit. You should still receive a refund if you were honest throughout the application.
Does the holding deposit need to be protected in a deposit scheme?: No — the Housing Act 2004 deposit protection requirements apply only to tenancy deposits paid after the tenancy begins. A holding deposit paid before the tenancy commences is not a tenancy deposit and does not need to be protected in DPS, TDS, or MyDeposits.

Deposit Cap (5 Weeks)
Assured Shorthold Tenancy (AST)
housing-act-2004-s-213
deposit-return-deadline

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