Understanding the Maximum Tenancy Deposit Rules

Since June 2019, landlords in England are limited to requesting a tenancy deposit equivalent to no more than five weeks’ rent. This cap increases to six weeks for properties with an annual rent exceeding £50,000. These limits were introduced as part of the Tenant Fees Act 2019 to protect tenants from excessive upfront costs while ensuring landlords retain adequate security.

Alongside tenancy deposits, the Act also restricts holding deposits to a maximum of one week’s rent. Holding deposits are payments taken to reserve a property before the tenancy agreement is signed.

How to Calculate the Maximum Tenancy Deposit

Calculating the maximum deposit is straightforward. Landlords should:

1. Multiply the monthly rent by 12 to find the annual rent.
2. Divide the annual rent by 52 to determine the weekly rent.
3. Multiply the weekly rent by 5 to get the maximum deposit amount (or by 6 if the annual rent is above £50,000).

For example, a monthly rent of £1,500 equates to an annual rent of £18,000. Dividing by 52 gives approximately £346 per week, so the maximum deposit would be five times this amount, which is £1,730.

Alternatively, a quick calculation can be done by multiplying the monthly rent by 1.15385 to estimate five weeks’ rent.

Deposit Protection and Legal Obligations

Despite the change in deposit limits, the process for protecting tenancy deposits remains unchanged. Landlords must still place the deposit in a government-approved tenancy deposit protection scheme within 30 days of receipt and provide tenants with prescribed information about the scheme.

Failure to comply with deposit protection requirements can result in serious penalties, including fines up to three times the deposit amount and restrictions on serving eviction notices.

Practical Implications for Landlords

Landlords should ensure their tenancy agreements and deposit requests comply with the five or six-week cap depending on the rent level. It is important to note that rounding up the deposit amount is not permitted; as Clive, a landlord, emphasised on 2 May 2019, “If you want to ‘round off’ you must round down and not up. If you round up you will be breaking the law as you are charging more than 5 weeks rent (even if it is by 1p).”

Landlords should also be aware of the holding deposit cap of one week’s rent and ensure they do not exceed this when securing a tenancy.

Summary

UK landlords must adhere to the Tenant Fees Act 2019 by charging no more than five weeks’ rent for tenancy deposits, or six weeks if the annual rent is above £50,000. Calculating the deposit correctly and protecting it within the required timeframe is essential to avoid legal penalties and maintain good landlord-tenant relationships.

Suggested internal link anchors

• Tenant Fees Act 2019
• tenancy deposit protection
• holding deposit rules
• maximum tenancy deposit calculation
• deposit protection schemes
• landlord legal obligations
• eviction notice restrictions
• private rented sector regulations
• tenant security deposits
• rent calculation methods

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/