A holding deposit or holding fee is a payment to a landlord or letting agent to reserve a property, and you may be asked to pay it before you sign a tenancy agreement. Some landlords or agents ask for a holding deposit while they carry out pre tenancy checks. For example, referencing, affordability or credit checks.
This small financial commitment reassures the landlord or agent of your intention to proceed and complete the application and provide all documents without delay, allowing the landlord or agent to confidently remove the property from the marking and “hold” the property for you, while all the checks are completed.
Your landlord doesn’t have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed). Once you become a tenant, the holding deposit becomes a deposit which the agent must protect or part of your rent.
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