Off the market

A rental property is "off the market" when the landlord stops actively advertising it and ceases to accept new applications. In the lettings context this most commonly means the listing has been withdrawn from portals, viewings have been paused, and one applicant is being progressed toward a tenancy, usually after a holding deposit has been paid. Under Schedule 2 of the Tenant Fees Act 2019, a landlord must not hold more than one holding deposit per property at the same time, which means taking a deposit from one applicant obligates the landlord to treat the property as off the market for the duration of the reservation period.

The holding deposit and the reservation

A holding deposit is a payment of up to one week's rent paid by a prospective tenant to reserve a property while reference checks are completed and the tenancy agreement is prepared. It is capped at one week's rent under the Tenant Fees Act 2019. The weekly figure is calculated as (monthly rent × 12) ÷ 52. Holding more than this cap is a prohibited payment.

Once a holding deposit is received, the landlord or agent has 15 calendar days to conclude the tenancy agreement, this period is called the deadline for agreement. Both parties can agree in writing to extend this deadline, but the extension must be confirmed in writing before the original 15 days expire. Landlords using August can set a smart reminder for the 15-day deadline as soon as a holding deposit is received, so the statutory window never expires unnoticed.

When the holding deposit must be refunded

The default position under the Tenant Fees Act 2019 is that the holding deposit must be refunded. Refund is required in the following situations: the landlord decides not to proceed with the tenancy; the parties do not reach a tenancy agreement within the deadline for agreement through no fault of the tenant; or the landlord imposes any requirement that breaches the fee ban. Where a refund is required, it must be returned within 7 days of the decision not to proceed, or within 7 days of the tenancy agreement being signed. If the landlord intends to retain the deposit, they must give the tenant written reasons within 7 days of that decision.

When the landlord can retain the holding deposit

The Tenant Fees Act 2019 sets out the grounds on which a landlord may lawfully keep the holding deposit rather than refunding it. These are: the tenant withdraws from the tenancy; the tenant fails a Right to Rent check; the tenant provides false or misleading information that materially affects the landlord's decision to let; or the tenant fails to take reasonable steps to enter the agreement before the deadline despite the landlord being ready to proceed.

A failed reference check does not by itself entitle the landlord to retain the deposit. If the information the tenant provided was accurate and the failure arose from objective factors, an adverse credit record, for example, the deposit is generally refundable. Retention is justified where the tenant provided false information that caused the failure.

When a property goes off the market without a holding deposit

A property can also be taken off the market without a holding deposit, for example, where the landlord has decided to sell, refurbish, or move in, and is not advertising the property for let at all. There is no statutory obligation to take a holding deposit when withdrawing a property from the market; the rules only apply once a deposit has been accepted. If the application falls through and the property goes back on the market, the period of time between tenancies becomes a void period, costing the landlord rental income for each day the property sits empty.

The rules governing how much can be charged and when it must be returned are set out in the Tenant Fees Act 2019 and its statutory guidance. For a full explanation of the differences between a holding deposit and a tenancy deposit, including what happens to each if the tenancy falls through, see our guide to holding deposits and tenancy deposits.

Frequently asked questions

How much can a holding deposit be in England?

A holding deposit is capped at one week's rent under the Tenant Fees Act 2019. The weekly rent is calculated as (monthly rent × 12) ÷ 52. A landlord or agent cannot hold more than one week's rent, and cannot hold more than one holding deposit per property at the same time. Any amount above the cap is a prohibited payment.

Is a holding deposit refundable if referencing fails?

It depends on why referencing failed. If the applicant provided accurate information and the reference failed due to objective factors, a low credit score or insufficient income, the deposit is generally refundable. If the applicant provided false or misleading information that affected the landlord's decision to proceed, the landlord may lawfully retain the deposit. The landlord must give written reasons for retention within 7 days of the decision.

What is the deadline for agreement?

The deadline for agreement is the 15-calendar-day period, starting from the day the holding deposit is received, within which the tenancy agreement must be signed. Both parties can agree in writing to extend this period. If the deadline passes without a tenancy being entered, and the tenant is not at fault, the holding deposit must be returned in full within 7 days.

Do holding deposit rules apply in Scotland?

No. Holding deposits are generally treated as prohibited premiums in Scotland under the Housing (Scotland) Act 2006. Scottish landlords can only request a tenancy deposit once a tenancy agreement has been reached. The Tenant Fees Act 2019 applies to England only; Wales has broadly similar rules under the Renting Homes (Fees etc.) (Wales) Act 2019.