# Holding deposit rules for letting agents: the 15-day deadline, the 7-day refund and when you can keep it

> A holding deposit is capped at one week's rent and has a 15-day deadline. The dates worked through, a keep-or-refund table and the written notice to send.

- Page to cite: https://aeolookup.com/letting-agents/holding-deposit-rules-15-day-deadline-refund/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Letting agents, Deposits, rent and fees
- Published 1 October 2026
- Key fact: Under Schedule 2 of the Tenant Fees Act 2019, a holding deposit received on 1 October 2026 has a deadline for agreement of 15 October 2026 and must be repaid, or the reason for keeping it given in writing, by 21 October 2026; on a £1,250-a-month let the most you can take is £288.46.
- Sources: Tenant Fees Act 2019 section 8, Schedule 1 paragraph 3 and Schedule 2 (legislation.gov.uk); GOV.UK "Fees you can charge as part of a tenancy" (updated 7 July 2026); GOV.UK "Assured periodic tenancies: a guide for landlords"; GOV.UK "Tenancy deposit protection"; all read 2026-10-01.

A holding deposit is capped at one week's rent. It has to lead to a signed agreement by the 15th day after you receive it, and it has to be repaid within 7 days unless one of four exceptions applies. Even then you must tell the applicant why in writing within those 7 days, or the right to keep it is lost.

The rules sit in the Tenant Fees Act 2019. The Renters' Rights Act left them in place. What changed on 1 May 2026 is what else you can take before signing: no rent at all, though GOV.UK confirms you can still ask for a holding deposit and a tenancy deposit.

**Free tool on the page:** Holding deposit written notice maker. It runs in the browser at https://aeolookup.com/letting-agents/holding-deposit-rules-15-day-deadline-refund/#tool and asks for no sign-up.

## The cap

The Act defines one week's rent as the annual rent divided by 52. For a let at £1,250 a month:

- £1,250 × 12 = £15,000 a year
- £15,000 ÷ 52 = £288.46

Dividing the monthly rent by 4 gives £312.50, which is £24.04 over. The excess is a prohibited payment. Our [deposit cap calculator](https://aeolookup.com/letting-agents/tenancy-deposit-cap-calculator/) does the sum for any rent.

Two more limits come from GOV.UK. The cap is per tenancy, not per tenant, so three sharers pay one week's rent between them. And "you cannot accept more than one holding deposit per tenancy at a time". With three applicants keen on one flat, you take one deposit.

## The dates, worked through

Schedule 2 sets the "deadline for agreement" as the fifteenth day of the period that begins on the day you receive the money. The day of receipt is day one. Repayment is due within 7 days beginning with the event that triggers it, and that day also counts as day one.

For a deposit received on Thursday 1 October 2026:

| Event | Date | What follows |
|---|---|---|
| Deposit received | 1 October 2026 | Day 1 |
| Deadline for agreement | 15 October 2026 | Day 15 |
| No agreement by the deadline | 21 October 2026 | Last day to repay, or to give written reasons for keeping it |
| Landlord pulls out on 6 October 2026 | 12 October 2026 | Last day to repay, or to give written reasons for keeping it |
| Agreement signed on 9 October 2026 | 15 October 2026 | Last day to repay, unless the tenant agrees to put it towards rent or the deposit |

You and the applicant can agree a different deadline, but only in writing. If referencing is running slowly, agree the extension before day 15, not after.

## Keep or refund

| What happened | Outcome | Schedule 2 |
|---|---|---|
| The tenant signs | Refund, or put it towards the first rent or the tenancy deposit with the tenant's consent | Paragraphs 3(a) and 6 |
| The landlord decides not to let before the deadline | Refund | Paragraph 3(b) |
| The deadline passes because you or the landlord were slow | Refund | Paragraph 3(c) |
| The applicant gave accurate information and still failed referencing | Refund | No exception covers it |
| The applicant fails a Right to Rent check that you could not have known about when you took the money | Keep | Paragraph 8 |
| The applicant gave false or misleading information that bears on the decision to let | Keep | Paragraph 9 |
| The applicant withdraws before the deadline | Keep | Paragraph 10 |
| The applicant does not take all reasonable steps to sign, while you and the landlord do | Keep | Paragraphs 11 and 12 |

The fourth row is where agencies go wrong. A low credit score or an income that falls short is not false information. GOV.UK adds that a mistake which does not affect suitability, "a misspelling or a missing previous address", also means a refund.

The last two rows have a condition attached. Under paragraph 13 they fall away if the agent or landlord asked for a prohibited payment, or behaved in a way that made it unreasonable to expect the applicant to go ahead.

## The written notice

Paragraph 5 is short and often missed. If you believe an exception applies but do not give the person who paid a written notice explaining why within the 7 days, the deposit must be repaid anyway. A notice you can adapt:

> **Subject:** Your holding deposit for [property address]
>
> Dear [name],
>
> You paid a holding deposit of £[amount] on [date] to reserve [property address]. The deadline for agreeing the tenancy was [date].
>
> We are keeping [all of the deposit / £[amount] of the deposit] for this reason: [one reason from the list above, with the date and the facts. For example: you told us by email on 8 October 2026 that you no longer wished to go ahead.]
>
> [Any balance] will be returned to the account it came from by [date].
>
> If you think this is wrong, reply to this email and [name or role] will look at it again.
>
> [Name, agency, phone number]

Send it inside the 7 days and keep a copy with the evidence it refers to. One reason, stated plainly, is easier to defend than several.

## The penalty

Section 8 of the Act lets the enforcement authority impose a financial penalty of up to £5,000 for a breach of Schedule 2. GOV.UK puts it more simply: if you do not return the deposit, or do not give the reason in writing within 7 days, "you may receive a financial penalty".

## After signing: when the 30 days start

A tenancy deposit has to be protected within 30 days of receiving it. Where a holding deposit is put towards the tenancy deposit, paragraph 7 treats that money as received on the date of the tenancy agreement. If the agreement is signed on 9 October 2026 for a move-in on 1 November 2026, the clock for that money starts on 9 October, more than three weeks before the tenant has keys. Software that counts from the tenancy start date can miss the deadline. Check where yours counts from, and see the deposit items on our [2026 compliance checklist](https://aeolookup.com/letting-agents/lettings-compliance-checklist-2026/).

New tenancies also need written information about the key terms before signing; our guide to the [information sheet and written information](https://aeolookup.com/letting-agents/renters-rights-information-sheet-proof-of-service/) explains which tenancy gets which.

Overlyft ![](https://aeolookup.com/img/d/ours-badge.png) can set up an AI assistant that answers applicant enquiries and books viewings for a negotiator. It does not take, hold or refund deposits; the dates above stay with a person, and a person decides whether a deposit is kept.

This is general information for England, not legal advice.

## Short answers from this page

**How long does a letting agent have to return a holding deposit?** Seven days. A holding deposit is capped at one week's rent, and the deadline for agreement is the 15th day, counting the day it is received as day one. If no exception applies it must be repaid within 7 days; to keep it you must give the reason in writing within those 7 days. Received on 1 October 2026: deadline 15 October, repay or explain by 21 October.

**Can a letting agent keep a holding deposit if the tenant fails referencing?** Not if the applicant gave accurate information. The Tenant Fees Act 2019 lets an agent keep a holding deposit only for a failed Right to Rent check, false or misleading information, withdrawal before the deadline, or not taking all reasonable steps to sign. A low credit score or an income that falls short is none of those, so the deposit must be repaid within 7 days.

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General information for UK small firms, not legal, tax or financial advice.