Placing a holding deposit tells us tenants are serious about renting a property.

If the tenants fail referencing and can't secure appropriate guarantors, or the landlord isn't happy with these tenants, the amount is returned to the tenants. If the tenants decide they no longer want the property, the holding deposit is returned to the landlord.

In most cases a holding deposit is taken and subsequently deducted from the initial rent amount collected from tenants. So for example, if the rent of your property is £1000 per month, and you've taken a £250 from the tenant as a holding deposit, you'd only request £750 from the tenant as part of their first month rent in advance payment.