Tenancy Deposit Scheme Rules for Landlords in England

This guide covers England. Letting in Wales, Scotland or Northern Ireland? The main differences are in the section on deposits outside England, near the end.

If you let a property in England on an assured tenancy, which covers most private lettings, and you take a deposit, you must protect it in a government-approved tenancy deposit scheme (the Deposit Protection Service, mydeposits or the Tenancy Deposit Scheme) within 30 days of receiving it, and serve the prescribed information within the same 30 days. The prescribed information is the written detail of where the deposit is held and how the tenant gets it back.

The deposit itself is capped at five weeks' rent where the annual rent is below £50,000, or six weeks' rent at £50,000 or more. Since 1 May 2026, a court will not grant a possession order under most Section 8 grounds, the legal reasons you can use to end a tenancy now that Section 21 has gone, until the deposit rules have been met.

The rules in brief:

• Deposit cap: five weeks' rent below £50,000 annual rent; six weeks' rent at £50,000 or more; no statutory cap above £100,000 annual rent
• Holding deposit cap: one week's rent
• Protection deadline: 30 days from receiving the deposit, in one of three government-approved schemes
• Prescribed information: served on the tenant within the same 30 days
• Rent in advance: no rent at all before the tenancy agreement is signed, then at most one month's rent before the tenancy starts (or 28 days' rent if rent is paid more often than monthly)
• Cost of getting it wrong: a court order to pay the tenant one to three times the deposit, and no possession order under most Section 8 grounds until the deposit is protected and the information given, or the deposit is returned

How much can landlords charge for a deposit?

In England, the Tenant Fees Act 2019 caps a tenancy deposit at five weeks' rent where the annual rent is below £50,000 and six weeks' rent where the annual rent is £50,000 or more. Properties with an annual rent of more than £100,000 are not covered by the Tenant Fees Act, so the statutory cap does not apply to them.

One week's rent means the annual rent divided by 52. On a property let at £1,300 a month, the annual rent is £15,600, one week's rent is £300, and the maximum deposit is £1,500.

The Renters' Rights Act 2025 did not change these caps. Anything you take above the cap is a prohibited payment. A council can require you to repay it to the tenant and issue a civil penalty of up to £5,000 for a first breach, rising to up to £30,000 or prosecution for the same breach committed again within five years.

Are landlords required to collect a deposit?

No. A landlord or agent is not legally required to take a tenancy deposit, though it is generally advised. The deposit is a safety net in case of damage or missed rent payments. If you use a letting agent, your agreement with them may require you to collect one.

Taking a deposit is optional. Protecting a deposit you have taken on an assured tenancy is not. Once you accept the money, every rule below applies to you.

Tenancy deposit vs holding deposit

A holding deposit reserves the property while you run reference checks and is capped at one week's rent. A tenancy deposit is security against damage, unpaid rent and breaches of the agreement, and is capped at five or six weeks' rent depending on the annual rent.

You do not have to protect a holding deposit in a scheme. You can only put a holding deposit towards the tenancy deposit or first month's rent with the tenant's consent, and only once a tenancy agreement has been signed. If a holding deposit is applied towards the tenancy deposit with the payer's consent, the 30-day protection period begins on the date of the tenancy agreement (Tenant Fees Act 2019, Schedule 2, paragraph 7).

When should the landlord collect the deposit?

You can ask a prospective tenant for a holding deposit or a tenancy deposit before the tenancy agreement is signed. You cannot ask for rent before it is signed. Once you receive the tenancy deposit, you have 30 days to protect it in a government-approved scheme and 30 days to serve the prescribed information.

In practice, deposits are usually paid after the tenancy agreement is signed and before the tenant moves in. Count the 30 days from the day you receive the money, not from the day the tenancy starts.

What is a tenancy deposit scheme?

A tenancy deposit scheme is a government-approved service that protects a tenant's deposit for the length of the tenancy and settles disputes over deductions. Schemes were set up under the Housing Act 2004. A tenancy deposit is the money a tenant pays before moving in as security against damage, unpaid rent and other breaches of the agreement.

In England, a deposit taken on an assured tenancy must be protected by one of three government-approved schemes for the whole of the tenancy. At the end of the tenancy it is returned to the tenant, less any deductions you and the tenant agree. Where there is damage or rent owed by the tenant, the deposit can be used to cover those costs.

Do you need to use a tenancy deposit scheme?

Yes. If you take a deposit on an assured tenancy in England, including the assured periodic tenancies that replaced assured shorthold tenancies on 1 May 2026, it must be protected in a government-approved deposit protection scheme. This is a legal requirement, not best practice.

Not every letting is covered. If you rent a room in your own home to a lodger, you do not have to protect their deposit in a scheme, though you can choose to (gov.uk).

The schemes safeguard the deposit during the tenancy and offer free, impartial adjudication if you and your tenant disagree about deductions. Getting protection wrong is expensive: see what happens if you don't protect a deposit correctly, below.

Within 30 days of receiving the deposit, you must also give the prescribed information to the tenant and to anyone who paid the deposit on the tenant's behalf. This is written information about the deposit and where it is held. It includes:

• The address of the rented property
• How much deposit was paid
• How the deposit is protected
• The name and contact details of the scheme and its dispute resolution service
• Your name and contact details, or your letting agent's
• The tenant's contact details, including the details to use to contact them at the end of the tenancy
• The name and contact details of any third party who paid the deposit
• Why you would keep some or all of the deposit
• How the tenant applies to get the deposit back
• What the tenant should do if they cannot contact you at the end of the tenancy
• What the tenant should do if there is a dispute over the deposit
• A certificate signed by you confirming the information is accurate to the best of your knowledge and belief, and that you have given the tenant the opportunity to sign it to confirm this

On a custodial scheme, the scheme's custodial terms and conditions must also be included. This list is a summary, not the full legal requirement, so use your scheme's complete prescribed information template rather than writing your own (Housing (Tenancy Deposits) (Prescribed Information) Order 2007, article 2).

What are the government tenancy deposit schemes?

There are three government-approved tenancy deposit protection schemes in England. All three offer a free custodial option and a paid insured option, and the protection the tenant receives is the same whichever you choose.

On a custodial scheme, the scheme holds the deposit for free until the tenancy ends. On an insured scheme, you or your agent keep the money and pay the scheme to insure it. The insurance means the tenant still gets their money back if you fail to repay it. The 30-day protection deadline, the prescribed information requirement and the free adjudication service are identical either way.

If you would rather not hold the money or pay a fee, the custodial option is the simpler choice. Insured fees are set by each scheme, so check the scheme's own website before you choose.

Rent in advance: the one-month limit

Since 1 May 2026 you cannot ask for, encourage or accept any rent before the tenancy agreement is signed. Once it is signed, and before the tenancy starts, you can ask for the first month's rent if the tenant pays monthly, or up to the first 28 days' rent if they pay more frequently than monthly. This is separate from the deposit, which you can still ask for before the agreement is signed.

Once the tenancy has started, you cannot require rent before the due date in the tenancy agreement. Any clause in the agreement requiring rent in advance has no effect. A tenant may still choose to pay early if they want to.

A council can issue a civil penalty of up to £5,000 for a first breach and require you to repay the unlawful payment to the tenant. Commit the same breach again within five years and the penalty rises to up to £30,000, or the council can prosecute. The rules apply to assured periodic tenancies in England and do not apply to tenancy agreements signed, or advance rent paid, before 1 May 2026.

For a fuller walkthrough, see our guide to the rent in advance rules under the Renters' Rights Act.

What happens if you don't protect a deposit correctly

Getting the deposit wrong now costs you two things: money, and your ability to end the tenancy.

The money. A tenant, or a former tenant, can apply to the county court. If the tenancy is still running, the court must order whoever holds the deposit to repay it to the tenant or pay it into a custodial scheme within 14 days. If the tenancy has ended, the court may order all or part of it to be repaid.

In either case, where the court finds the deposit was not protected or the prescribed information not given on time, it must order you to pay the tenant between one and three times the deposit within 14 days (Housing Act 2004, section 214).

The possession bar. Since 1 May 2026, when Section 21 no-fault evictions were abolished, you have to show that the deposit was protected in a government-approved scheme, that you complied with that scheme's requirements, and that you gave the tenant the prescribed information before you can use most possession grounds. A court will only grant a possession order if one of the following is true:

• You protected the deposit in a government-approved scheme, complied with the scheme's requirements and gave the tenant the correct information
• You returned the deposit to the tenant in full, or with deductions the tenant agreed
• The tenant challenged you in court over the deposit protection requirements and the case has been decided, settled or withdrawn

The bar does not apply to grounds 7A or 14, the antisocial behaviour grounds.

The bar is not permanent. If you missed the original deadline, protecting the deposit and giving the prescribed information late, or returning the deposit, can put you back in a position to get a possession order. Late compliance does not cancel the original breach, though: the tenant can still claim the one to three times award. And the bar is about whether a court will grant the order, not whether you can serve a Section 8 notice.

One more trap. It is illegal to take a deposit in any form other than money. If you accepted an item such as a car or a watch, you must return it before you can obtain possession on any ground.

If you are behind on any of this, our Renters' Rights Act information sheet guide sets out the wider compliance picture.

When do landlords need to return the tenant's deposit?

The deposit must be returned within 10 days of you and your tenant agreeing how much they get back. The clock starts when you agree the figure, not when the tenancy ends and not when the tenant asks.

If you hold the deposit on an insured scheme, return it directly to the tenant within those 10 days. You do not need to wait for a request.

For deposits held in a custodial scheme, the tenant can request the money directly from the scheme using the details you gave them in the prescribed information. The scheme will then contact you or your agent to approve the release.

If you and the tenant are in dispute, the deposit stays protected in the scheme until the issue is settled. On an insured scheme you or your agent must hand the disputed amount to the scheme to hold.

What costs can be deducted from the tenant's deposit?

You can deduct for loss you have actually suffered because of something the tenant did or failed to do. You cannot deduct for the ordinary cost of owning and maintaining the property.

Deductions you can usually make

• Damage to the property caused by the tenant, their guests or their pets
• Damage demonstrably caused by the tenant's negligence, supported by evidence and excluding defects or failures within the landlord's responsibilities
• Missing or damaged furnishings and fittings
• Cleaning to return the property to its condition at check-in
• Removal and disposal of belongings left behind
• Unpaid rent and unpaid bills the tenant was responsible for

Deductions you cannot make

• Fair wear and tear, such as worn carpets or scuffed paintwork from normal use
• Repairs to the structure of the property
• Replacing or repairing appliances that have simply reached the end of their life
• Redecorating or repainting as a matter of course between tenancies
• Anything that is part of your own repairing obligations as a landlord
• Betterment, meaning charging the full cost of a brand new item to replace an old one

Evidence you need

• A detailed check-in inventory and schedule of condition, dated and signed
• A matching check-out inventory with dated photographs or video
• Invoices or quotes for the actual work, not estimates you have made up
• A rent statement showing amounts due and amounts received, for any arrears claim
• Written correspondence showing you told the tenant about the issue

Tenants must treat the property with care and report issues to you. Unless a repair is needed solely because of the tenant's negligence, the cost of that repair is yours.

With damp and mould in particular, investigate the cause first: government guidance says it is unreasonable to blame it on tenants' lifestyle, and the usual causes are ventilation, heating or building defects (gov.uk). If you do deduct, give the tenant an itemised breakdown of every deduction and the reason for it.

How to deal with and prevent tenancy deposit disputes

If you want to make deductions, tell the tenant first and put the deductions and your reasons in writing. If you cannot agree, you can use the free dispute resolution service provided by your deposit protection scheme.

The scheme's adjudicator will consider evidence from both sides, such as property photos and videos, correspondence, and inventory and check-out reports, and reach a decision. Using the service is optional, but both you and the tenant have to agree to it, and the decision is final (gov.uk). If either of you does not agree to use it, the dispute can go to the county court instead.

To avoid disputes, keep proper records of the property's condition. That means a thorough inventory before move-in, mid-term inspections, and a check-out inventory. For your claim to succeed, these documents need to prove the damage is real and attributable to the tenant. Without them, the chances of a scheme siding with you are low.

For rent arrears, keep an accurate record of all rent due and collected. If a tenant falls behind, our guide on what to do if a tenant is not paying rent sets out your options. Landlord Studio keeps a record of rent due and received that you can export as a report, which helps if you need evidence for an arrears claim.

Deposits outside England

If your property is elsewhere in the UK, the main differences are:

• Wales: you use the same three schemes as England, but deposits are taken on occupation contracts under the Renting Homes (Wales) Act 2016. You have 30 days from receiving the deposit to protect it and give the contract-holder the required information. If you do not, a court must order you to pay them one to three times the deposit.
• Scotland: you must protect the deposit within 30 working days of the tenancy starting, with Letting Protection Service Scotland, mydeposits Scotland or SafeDeposits Scotland, and give the tenant the required information within the same 30 working days. A deposit cannot be more than two months' rent. If you do not protect it, the First-tier Tribunal for Scotland can order you to pay the tenant up to three times the deposit.
• Northern Ireland: separate schemes and rules apply.

Frequently asked questions

How much deposit can a landlord take in England?

The deposit is capped at five weeks' rent where the annual rent is below £50,000, and six weeks' rent where the annual rent is £50,000 or more. One week's rent means the annual rent divided by 52. Properties with an annual rent above £100,000 are not covered by the Tenant Fees Act 2019, so the statutory cap does not apply to them.

Is the tenancy deposit scheme a legal requirement?

Yes, for assured tenancies in England, which covers most private lettings. If you take a deposit you must protect it in one of three government-approved schemes within 30 days of receiving it, and serve the prescribed information within the same 30 days. Taking a deposit is optional. Protecting one you have taken is not. A resident landlord does not have to protect a lodger's deposit.

How does a tenancy deposit scheme work?

Every scheme offers two options. On a custodial scheme the scheme holds the money for free until the tenancy ends. On an insured scheme you or your agent hold the money and pay the scheme to insure it. Both give the tenant the same protection and the same free adjudication service if you disagree about deductions.

What is the new law for landlords in 2026?

The main tenancy reforms in the Renters' Rights Act 2025 took effect on 1 May 2026. Section 21 no-fault evictions are abolished, you cannot ask for or accept any rent before the tenancy agreement is signed, and a court will not grant possession under most Section 8 grounds unless the deposit was properly protected and the prescribed information served.

What happens if a landlord doesn't protect a deposit?

The tenant or former tenant can apply to the county court. During the tenancy the court must order the deposit repaid or paid into a scheme. Once the tenancy has ended it may order all or part repaid. Either way it must order the landlord to pay the tenant one to three times the deposit. Since 1 May 2026 the landlord also cannot get a possession order under most Section 8 grounds until the deposit is protected and the information given, or the deposit is returned.

Are the deposit rules different in Scotland and Wales?

Yes. Wales uses the same three schemes as England, with 30 days to protect the deposit. In Scotland you have 30 working days from the start of the tenancy to protect the deposit and give the tenant the required information, you use one of three Scottish schemes, and the deposit cannot be more than two months' rent.

Related guides

• What is a rent guarantor and when should landlords require one?
• Landlord Responsibilities and Legal Obligations: The Checklist
• A Landlord's Guide to Tax on Rental Income
• Top 5 Allowable Expenses Missed by Landlords

Sources and further reading

Every figure on this page is taken from government sources. Rules change, so check the original before you act on it.

• GOV.UK: Deposit protection schemes and landlords
• GOV.UK: Tenancy deposit protection
• Tenant Fees Act 2019, Schedule 1 (permitted payments)
• GOV.UK: Repossessing your privately rented property after 1 May 2026
• GOV.UK: Asking for rent in advance (statutory guidance)
• Tenancy Deposit Schemes (Scotland) Regulations 2011, regulation 3
• Scottish Government: Private residential tenancy model agreement notes (deposits)
• Renting Homes (Wales) Act 2016, section 45
• Housing Act 2004, section 214
• Housing (Tenancy Deposits) (Prescribed Information) Order 2007, article 2
• GOV.UK: Tenancy deposit disputes and problems

This guide is general information for landlords in England, not legal advice. Get advice from a qualified professional on your own circumstances.