When you rent out a residential property you are able to ask the tenant for a deposit to hold during the term of the tenancy to cover any non-payment of rent, cleaning, damage or breakages that may occur during the tenancy.
You can decide on the level of the deposit but it is usual to ask for one month’s rent in advance.
The maximum level of tenancy deposit you can ask a tenant to pay in England depends on the total annual rent for the property:
up to five weeks’ rent if the total annual rent for the property is less than £50,000
up to six week’s rent if the total annual rent for the property is £50,000 or above
In England & Wales, deposits taken by landlords of assured shorthold (AST) tenants (with rent rent of up to £100,000 per year) must comply with the tenancy deposit protection scheme.
In Scotland, all deposits taken by all landlords must be paid into an approved deposit protection scheme.