/ Home & Energy

What happens when a holding deposit doesn’t hold up?

Holding deposit

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.


I have to admit to being struck that it had to happen to a Which? staffer before anything was done. Does this mean that that Which? has not been hearing of this in the media or from subscribers?

My second feeling is the sooner Which? re-locates from central London the healthier both financially and physically staff will be.

And thirdly removing workers from London will cool the market for those forced to live there. Nurses, doctors , teachers tied to a specific site.

Lastly why is Which? not naming the names of the agents /letting agents involved. If worried about defamation cases , unlikely, a few hidden cams would provide adequate proof and a greater case. This also ties in with the other area untouched by Which? new build housing scams.


As is the norm with Convo, I’ve written about my personal experience and we’re keen to hear from others who’ve been in a similar situation. As was the case in my situation, there were other people impacted at the same time – not just me as a Which? employee. Unfortunately there isn’t a lot of information out there about holding deposits.

So, we also wanted to help people understand the situation they find themselves in a bit better, which is why we’ve written our new advice guide.

Whether Which? is in London or not doesn’t stop other consumers from potentially being trapped in this holding deposit/bidding war scenario.


“London” just raises an emotive topic from some members as to why Which? has to maintain such a large presence there with a consequent financial impact upon its employees.

It will be interesting to see if this practice is widespread (and, if so, disappointing). I wonder if it is legal, particularly given the scrutiny letting agents fees are being subjected to.


It is very difficult to generate publicity about bad practice by dodgy dealers in the property market. The local newspapers will not touch it because their advertising revenue is at stake. The trade is notorious for its barrow-boy behaviour and people have lost their sense of disgust at their disreputable practices. Hopefully, bringing it to light here and in other responsible media will alert people, but as Adam has explained, prospective tenants are on the back foot in their relationships with letting agents and dare not upset the market manipulators as it might doom their future prospects.

I strongly agree with Patrick’s second and third points because the London property market is tailor-made for exploitation by the unscrupulous and there are few defences available other than leaving it. Companies and other organisations should do themselves and their staff a favour by preparing to go now before hiring good staff with contentment with their living arrangements becomes impossible and salaries are driven over the edge of sustainability by high rents and loan repayments.


I cannot offer any useful comment but it adds realism when Which? staff talk about their unfortunate experiences, especially familiar faces such as Adam who has provided many Conversations.

I hope that others will come along and share their stories.


I wonder what would have happened if, instead of agreeing to a deposit while the offer was being considered, Adam had said he wanted the flat, asked what rent would secure it, and then decided whether to take it or not?

I totally agree with Patrick’s comment about Which?’s location. Not only does it penalise its staff in high property or commuting, costs (one travels from Devon, I believe) but these costs will mean less of its income (subscriptions) from its Members will be available for its real work. If it needs to be in London (why?) it could have a small office with a token presence. Adam should not have had this property nightmare if he could have lived away from the capital – and all of its nitrous oxides.

Good luck with finding the place you’d like, Adam, if you’re still looking.


We thought we had agreed to take the flat at the rate it was advertised, and that paying the deposit secured it. It was only the next day we found out others had done the same, and the letting agent tried to get us all to outbid each other.

Ps – We did find a nice flat in the end, thanks Malcolm!


@afrench, thanks Adam. Glad it worked out well in the end. Duplicitous 🙁