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What is a holding deposit and will I get it back? 

An overview of a holding deposit and when you will get it back. 

A holding deposit is a payment you will make to reserve your accommodation whilst you complete the tenancy agreement. The maximum amount you can pay is 1 week's rent.

When you make the holding deposit payment the property (or room) you have made the deposit for should be taken off the market to allow you time to complete the agreement. 

Holding deposits are common in England and Wales, but are not allowed in Scotland.

When will I get my holding deposit back

The landlord can keep the holding deposit for 15 days, after which time it should be returned to you. The landlord can only keep the holding deposit if:

  • You decide not to rent the property
  • You provide false information
  • You do not pass a right to rent check

You should get the money back if the landlord decided not to rent to you  or if you fail referencing checks. 

Advance rent 

Some property owners charge an advance rent payment rather than a holding deposit. This works in a very similar way. You will pay the advance rent to take the room or property off the market and receive it back when you complete the tenancy agreement.

In most cases, advance rent and holding deposit payments are credited back against your first rent instalment.  In some cases the holding deposit will convert to a damage deposit. 

Damage deposit v Holding Deposit

It is important to be aware that there are different types of deposit. A damage deposit is an amount of money you may need to pay to the landlord at the beginning of the tenancy. This deposit will be held until the end of the tenancy and the landlord may be able to deduct money from this deposit against any damages you have caused.

Check the terms

While the general rule is that the holding deposit must be paid back within 15 days, this time frame can vary if both you and the landlord agree. It is quite common for halls or residence to have a shorter time frame to agree the tenancy agreement (for example 3 - 7 days) and this will normally be in the terms that you sign when booking a room in a Hall.