Tenancy deposit rules in 2026: the 5-week cap, the 30-day deadline and the £4,200 mistake
Deposit protection feels like admin and turns out to be the most expensive corner a landlord can cut. Get it wrong and your tenant can claim up to three times the deposit back - and since the Renters' Rights Act came into force on 1 May 2026, the same slip can stop you recovering your own property. This guide sets out what you must do, by when, and what it costs if you don't.
The cap: 5 weeks' rent, sometimes 6
You cannot ask for whatever deposit you like. Under the Tenant Fees Act 2019, which the Renters' Rights Act left untouched, the deposit is capped at five weeks' rent where the annual rent is under £50,000. Where the annual rent is between £50,000 and £100,000, the cap rises to six weeks' rent. Work it out from the weekly rent - monthly rent times 12, divided by 52. Charge over the cap and the excess is unlawful and must be returned.
The 30-day deadline (and the part everyone forgets)
From the day you receive the deposit you have 30 calendar days - not working days - to do two entirely separate things. First, protect the money in one of the three government-authorised schemes: the Deposit Protection Service (DPS), MyDeposits, or the Tenancy Deposit Scheme (TDS). Second, serve the prescribed information on your tenant.
That second step is where compliant-looking landlords come unstuck. Protecting the deposit is not enough on its own. The prescribed information is a specific set of details - which scheme holds the money, how it is protected, how the tenant gets it back and how disputes are resolved - and it must also go to any "relevant person" who chipped in, such as a guarantor or a parent who paid on the tenant's behalf. Partial compliance counts as no compliance.
What changed on 1 May 2026
The deposit framework itself survived the reforms, but the consequences of getting it wrong grew teeth. Under the old system, a botched deposit mainly blocked a Section 21 notice. Section 21 no longer exists, so that penalty had to be rebuilt around the new route to possession - the Section 8 notice.
The change that matters most: a court can now only make a possession order under most Section 8 grounds if the deposit is held in an authorised scheme and the protection requirements have been met. In plain terms: an unprotected deposit, or one where the prescribed information was never served, bars you from possession on almost every ground - arrears, selling, moving in, breach of tenancy. The only exceptions are the antisocial behaviour grounds (7A and 14). So the tenant who never had their deposit protected is, in practice, very hard to remove.
The deadlines and penalties at a glance
| Obligation | Deadline | What it costs to miss |
|---|---|---|
| Protect the deposit in an authorised scheme | Within 30 days of receipt | Penalty of 1 to 3 times the deposit; possession blocked on almost all Section 8 grounds |
| Serve the prescribed information | Within 30 days of receipt | A separate 1 to 3 times penalty - it can stack on top of the above |
| Keep the deposit at or under the cap | At the point it is taken | The over-cap amount is unlawful and must be repaid |
| Return the deposit after any deductions | Within 10 days of agreeing the figures | Dispute referred to the scheme's free adjudication |
The £4,200 mistake, in numbers
Say the rent is £1,213 a month, so five weeks' rent - the deposit - is roughly £1,400. Miss the deadline and the court can award the tenant up to three times that figure, about £4,200. Because protection and prescribed information are distinct duties, a landlord who did neither can be penalised for each. All to save the ten minutes it takes to lodge the money and send one document.
Start the tenancy compliant from day one
Our Assured Periodic Tenancy Agreement Pack sets out the deposit clause correctly for the 2026 rules and includes a move-in compliance checklist covering deposit protection, prescribed information and the documents you must give before your tenant moves in - delivered instantly as PDF and Word.
See the packs →Frequently asked questions
Does the deposit cap change if my tenant renews? No. The cap applies for the life of the tenancy, including once it rolls into the periodic tenancy that all tenancies now are.
Can I use an insurance-backed scheme instead of holding the money? Yes. Each scheme offers a custodial option (it holds the cash, free) and an insured option (you hold the cash, pay a fee). Both are compliant; custodial is simplest for most self-managing landlords.
My deposit was protected but I'm not sure the prescribed information went out - am I safe? Not necessarily. If you cannot evidence that it was served within 30 days, treat it as a live risk. Serving it late reduces some exposure but does not undo a missed deadline. Take advice before serving any notice.
Do these rules apply to lodgers? No. A live-in lodger who shares your home is on a licence, not an assured tenancy, and sits outside the scheme rules.
For the wider picture, read our guides on what a tenancy agreement must now contain and the Section 8 grounds and their notice periods.
This guide is general information for landlords in England, not legal advice for your specific circumstances. Deposit rules carry real financial penalties - if you are unsure about your position, take professional advice before acting.