Two deposits, two jobs
A holding deposit reserves a property while checks and paperwork are completed. In England it can be no more than one week’s rent. A tenancy deposit is security against matters such as unpaid rent or damage and is normally capped at five weeks where annual rent is below £50,000, or six weeks for annual rent from £50,000 to £100,000.
Ask in writing what a holding payment will be used for, the deadline for agreement and when it can be retained or refunded.
Protection and prescribed information
For an assured periodic tenancy, a landlord taking a qualifying deposit must use a government-approved scheme and give the required information. Keep the scheme certificate, inventory, payment proof and check-in photos together.
At the end, request the deposit promptly and respond to proposed deductions with evidence. The scheme offers a dispute process when agreement is not possible.
The lodger exception
If you live in your landlord’s home and share living space, you may be a lodger. The landlord generally does not have to protect that deposit in an approved scheme, although they can choose to. Get a receipt, a written inventory and clear deduction terms anyway.
Rules differ in Wales, Scotland and Northern Ireland, so use the relevant nation’s official guidance.