What deposit do I have to pay?
Typically there are two deposits you have to give. They are the holding deposit and the damage deposit.
Holding deposit
This is used to reserve your accommodation whilst things like tenancy agreements are being drawn up and checks are being done. Holding deposits are only allowed in England and Wales and the most you can be charged in England is 1 week’s rent. Be aware that you could lose this deposit if you don’t complete the tenancy agreement within an agreed timeframe.
Damage deposit
The next deposit is one that you will pay once you have signed everything and the accommodation is yours! The purpose of this deposit is to protect the landlord or accommodation provider against any damage or unpaid rent that may occur during your tenancy.
The landlord, letting agent or hall may deduct a portion of the deposit to cover any damages or unpaid rent, so it's important to keep the property in good condition and pay your rent on time!
For more information about when to pay your rent and deposit, read when should I pay my deposit and first month's rent?
How much deposit will I need to pay?
The cost of both types of deposits do vary. If you are live in a university-owned halls of residence in your first year, the deposit amount is likely to be lower than if you are renting a private property. Some universities may not require a deposit at all for students not in their first year in university-owned accommodation, but it's important to check with your specific university to confirm their policies.
The cap on deposits that a landlord can charge you in England is 5 weeks rent or 6 weeks if the property is more than £50,000 annually. If you are a student in Scotland, it is handy to be aware that your deposit cannot be more than 2 months rent; so if you pay £500 a month, you cannot be asked for more than £1000 as your deposit - It is important to know your rights!
The most you can be charged for a holding deposit is 1 weeks rent in England, while in Scotland holding deposits are not allowed.
What happens to my deposit?
Your deposit should be protected by a recognised tenancy protection scheme like the Deposit protection service. The money should either be held by the scheme or insured by it. This should make getting the deposit returned a relatively simple process at the end of the tenancy. If there are any deductions made then each of these tenancy protection schemes as a dispute resolution service in the event that the amount of deductions is not agreed.
It is the law that you must be told where your deposit has been protected within 30 days of your tenancy starting. Also be aware that if the landlord lives in the property it is not always necessary for them to protect your deposit. You should think carefully before paying a deposit in this situation.
Check the details!
It's super important to carefully review the terms and conditions before signing any kind of contract and paying a deposit. Make sure you understand the amount of the deposit, the circumstances under which it can be forfeited. Also, it is a good idea to document the condition of the property at the beginning and end of your tenancy to help avoid any disputes over damages - you don't want to be blamed for things you did not do! To find out more you can read our blog on how to ensure you get your deposit back.
To help you make informed decisions about accommodation it is important to have a good understanding of the details related to your deposit. This can give you peace of mind and can help ensure a smooth and fair tenancy.
