A holding deposit has one job; to hold a rental property. But as Adam French, Senior Content Producer here at Which?, found out, it can be extremely frustrating when they don’t hold up their part of the bargain.
I’d been looking for a new flat for months. Going to viewings all hours of the night and day. Even fitting a swift return journey in during a lunch break. Squeezing myself into shoebox flats with 15 other prospective tenants and one grinning, swaggering letting agent.
The quality of accommodation offered at my price point varied wildly, from sleek new build pads with breathtaking views, to dishevelled hell-holes with nicotine stained walls and bathrooms that looked like they’d been installed some time in the latter 19th century, pre-rusted.
As such, anywhere nice drew intense competition with final rent offers regularly exceeding the original asking price by £100-£150. A hit my monthly budget just cannot take.
Finding a flat to call home
Then, finally my girlfriend and I found a great flat; good location, affordable at the asking price, well furnished, no mould or suspect looking wiring hanging out of the wall. And, importantly, a bathroom you could use without a having a regular tetanus booster.
We told the letting agent that we were interested. And he told us that there was a lot of interest in the property, with more viewings booked in tomorrow. We knew we had to act quick, our eyes met, and we said we’d make an offer there and then.
And then something altogether unexpected happened.
Demanding a holding deposit
The letting agent told us that to put our offer to the landlord and take the flat off the market he’d have to take £500 off us as a ‘holding deposit’.
This was the first nice flat we’d seen in weeks. We were worn down by months of flat hunting, and out of sheer desperation – and against our better judgement – we agreed and transferred the cash, which we understood was supposed to hold the property off the market for us until checks had been carried out.
Looking back this was madness, transferring £500 to someone you’ve just met, with no paperwork whatsoever. But, they know they have you over a barrel. Don’t play by their rules? Then good luck finding somewhere habitable anywhere soon.
That night, a little put out by the process, we excitedly discussed moving to our new flat.
Holding deposit hangover
But, the next morning I was on the receiving end of several missed calls and answerphone messages (I have a job, I was in a meeting…). It was the letting agent from the previous night.
He said that two other prospective tenants had also put down a £500 holding deposit the day before – a fact he must have known before we put our money down. We had paid a holding deposit that didn’t do what it said on the tin – it didn’t “hold” the property for us at all.
I was furious. The letting agent began pulling the strings and set about trying to play all parties off against each other in a bid to increase the rent offer. All the while holding £500 from each.
At this point we walked away and demanded our deposit back. A return that inexplicably took five full working days to come back into our account. All the while meaning that we couldn’t move forward with any other flats we saw, as we needed that money.
It happened again
I wish I could say this only happened once, but it happened TWICE, and with different letting agents! On the second occasion – after being burnt before – we’d had assurances that no-one else had put in a deposit, and our money would take the property off the market. We were lied to, plain and simple.
The very next day we both left work at breakneck speed for yet another viewing, both thoroughly sick of the entire ordeal, and waiting on another £500 deposit to be returned.
The third time’s the charm
The third and final time we encountered this infuriating process we immediately refused to even participate.
Paperwork and consumer protection
My colleagues and I put our heads together, knowing that this situation couldn’t be right. In the short term we’ve created an advice guide and template letter you can use to ensure you understand the terms and conditions of your holding deposit – should you find yourself in a similar situation.
Has anyone else encountered this sharp practice of paying a holding deposit, which hasn’t actually held the property for you? Have you been misled by a letting agent, claiming you’re the only party interested? Have you ever lost a holding deposit or struggled to get it returned to you? We’d love to hear from you.
Loading ...
