You found a flat, paid a holding deposit to take it off the market, and then the deal fell through. Now the agent has gone quiet, or told you flatly that you won't be getting your money back. A holding deposit is often a week's rent, so on a £1,500-a-month flat that's around £346 sitting in someone else's account.
The good news is that the rules here are tight and specific. A landlord or agent can only keep your holding deposit for one of four reasons, and if none of them applies, they have to give it back within a set time. Keeping it for the wrong reason is an offence the council can fine them for.
What is a holding deposit and how is it different from a tenancy deposit?
A holding deposit is a small sum you pay to reserve a property while the landlord runs references and right-to-rent checks. It shows you're serious and stops them letting to someone else while the paperwork goes through. It's governed by the Tenant Fees Act 2019.
It is not the same as a tenancy deposit, and the two get confused constantly. The tenancy deposit is the larger sum, capped at five weeks' rent (six if the annual rent is £50,000 or more), held against damage or unpaid rent and protected in a government scheme. If you go on to sign, your holding deposit is normally put towards the first rent or the tenancy deposit.
So the holding deposit reserves the property, the tenancy deposit secures the tenancy. For the tenancy deposit and how it's protected, see how to check if your deposit is protected.
How much can a landlord ask for a holding deposit in England?
No more than one week's rent. That's the hard cap under the Tenant Fees Act, worked out as your annual rent divided by 52.
On a rent of £1,500 a month, a week is about £346, so anything above that is a prohibited payment the landlord isn't allowed to take. A landlord or agent can also only hold one holding deposit for a property at a time, so they can't collect a week's rent from three hopeful applicants and pick one.
Since the Renters' Rights Act reforms came in on 1 May 2026, a landlord can no longer demand several months' rent up front either. Rent in advance is capped at one month, which you can read about in our guide on why a landlord can only ask for one month's rent in advance. A holding deposit is now the main up-front sum you should be asked for before signing, beyond the first month's rent and the tenancy deposit.
The four reasons a landlord can lawfully keep a holding deposit
Schedule 2 of the Tenant Fees Act 2019 sets out the only situations where a landlord or agent can keep your holding deposit. There are four.
- You fail a right-to-rent check. If the immigration check shows you don't have the right to rent in England, the deposit can be kept, as long as the landlord didn't already know about the problem when they took it.
- You give false or misleading information. If you provided information that reasonably affects the decision to let, for example about your income or references, and it turns out to be false or misleading, the deposit can be kept. An honest reference that comes back weak is not the same thing. A failed reference on truthful information doesn't let them keep your money.
- You pull out before the deadline. If you tell the landlord you no longer want the property before the agreement deadline, they can keep it.
- You don't take reasonable steps to sign. If you go quiet or don't do your part to enter into the tenancy while the landlord is doing theirs, the deposit can be kept.
If none of these four applies, your holding deposit must be refunded. A landlord changing their mind, or finding a tenant they prefer, is not on the list.
There's also a protection in your favour. If the landlord or agent broke the fee rules themselves, they can't rely on reasons 3 or 4 to keep your deposit.
How long does a landlord have to refund a holding deposit?
There are two clocks. The first is the 15-day deadline for agreement: unless you both agree a different date in writing, the landlord has 15 days from receiving the holding deposit to enter into the tenancy.
If they decide not to let to you, or the 15 days pass without a tenancy, your deposit must be refunded within 7 days. And if the landlord keeps it under one of the four reasons above, they have to tell you why in writing within 7 days of deciding not to let. Miss that written-reasons deadline and they lose the right to keep it, so it has to come back to you.
One point catches people out. Where the landlord decides before the deadline not to go ahead, that triggers the 7-day refund. That's different from you withdrawing, which is one of the four keep-reasons. Who pulled out, and when, decides whether the money is yours.
How much can a landlord be fined for keeping a holding deposit?
Keeping a holding deposit without a valid reason breaches the Tenant Fees Act. The council can impose a civil penalty of up to £5,000 for a first breach, rising to up to £30,000 or prosecution for a repeat within five years.
That's why reporting it to trading standards matters even after you've got your money back. The penalty is the council's tool for the whole area, and an agent who wrongly kept your deposit has likely done it to other applicants too.
What can you do if a landlord won't return your holding deposit?
Start in writing. Email the landlord or agent, say the property didn't go ahead, and ask for the refund, or for the written reason they're keeping it if they haven't given one. Reference the 7-day refund and written-reasons rules under the Tenant Fees Act, and keep a copy of everything.
If they refuse or ignore you, you have two routes and can use both. You can apply to the First-tier Tribunal (Property Chamber) to recover the deposit as a prohibited payment, and you can report the landlord or agent to your local council's trading standards team, who enforce the Act.
If you're not sure whether one of the four keep-reasons genuinely applies to you, that's the point worth checking before you write. Remedy can look at what happened and draft the letter asking for your holding deposit back.
