Holding deposits, tenancy deposits and rent in advance explained

Katerina Galkina · EN · 07/10/2026

These are three different payments

A holding deposit reserves a property while checks and the agreement are completed. A tenancy deposit secures obligations under the letting, such as compensation for justified damage. Rent pays for occupation. Ask for an itemised calculation and receipt for each payment: the word “deposit” in a message does not establish what the money is for.

The following concerns ordinary private renting in England, including London, after the 1 May 2026 reforms. It does not replace the rules for Wales, Scotland, Northern Ireland or arrangements involving a resident landlord. See the APT guidance ↗.

Holding deposit: up to one week's rent

The maximum is one week's rent. Convert a monthly rent into a weekly amount using monthly rent × 12 ÷ 52. Obtain refund conditions and the deadline for concluding the agreement. The usual period is 15 days unless another period is agreed in writing.

This is not an automatically non-refundable fee. It can, however, be retained in specified circumstances, such as withdrawing, providing misleading information or failing to take necessary steps. Ask for written reasons. With agreement, it can be credited towards rent or the tenancy deposit; it must remain visible in the calculation. The Tenant Fees Act guidance ↗ explains decision and repayment deadlines.

Tenancy deposit: separate protection

For an English letting covered by these rules, the usual cap is five weeks' rent where annual rent is below £50,000, and six weeks from £50,000. This is an overall cap, rather than permission to add a separate pet deposit above it.

For an APT, the money must be protected in an approved scheme within 30 days of receipt, and prescribed information must also be supplied. Verify registration directly with the scheme. At the end, repayment is due within ten days of agreeing the amount to be returned, rather than automatically ten days after handing back keys. See deposit protection ↗.

Rent in advance: signatures come first

Before all parties sign the tenancy agreement, the landlord or agent cannot accept rent, request it or encourage payment. Between signing and the APT starting, a monthly payer can usually be asked for no more than one month's rent; for weekly payers the limit is 28 days. Once the letting starts, rent cannot be required before its due date. Specific exceptions exist for certain social and supported housing.

Do not transfer six months “voluntarily to pass referencing”. Keep the advert, contract, calculations and messages; report unlawful demands to the council covering the property. Before paying a third party's bank account, verify the recipient's authority to receive the money.