Updated 1 November 2026. This guide concerns England; different rules apply elsewhere in the UK.
A holding deposit is money paid to reserve a rental property while pre-tenancy checks take place. It is different from the tenancy deposit held against damage or other liabilities during the tenancy, and different again from rent paid in advance. Keeping those payments separate makes the application easier to understand.
The government’s Tenant Fees Act guidance says the maximum holding deposit is one week’s rent. The usual deadline is fifteen days, unless a different period has been agreed in writing. Before paying, read the proposed tenancy agreement and establish exactly which home, rent and applicants the payment relates to.
Our practical suggestion is to keep a short application record: the advertisement, payment request, receipt, proposed agreement and any written change to the deadline. Record who received the money and when. If an agent is handling the process, ask whom to contact about missing documents or a refund.
When the money is returned
Government guidance explains that a holding deposit should normally be returned, but there are circumstances in which it can be retained. These include withdrawing from the application, providing false or misleading information to obtain the tenancy, failing a Right to Rent check, or failing to respond to requests needed for the application. A difficult reference is not, by itself, a reason to assume every payment can be kept.
If the landlord retains it, the guidance requires a written explanation within seven days. Refunds must also be made within seven days when due. The applicant can agree that the money goes towards the first rent payment or tenancy deposit instead; keep that agreement and a clear statement showing how it was credited.
Resolving uncertainty
Ask for a written breakdown if a payment is described only as an application or administration charge. The label does not establish that it is permitted. Keep correspondence and seek advice from Citizens Advice, Shelter or the council if the explanation does not match the rules.
This is a starting checklist, not a ruling on a disputed application. The applicable tenancy, the information supplied and the steps both parties took can matter. Clear records help an adviser assess those facts without relying on recollection.