Deposit Rules for Landlords: What Changes on 1 May 2026

A lot is changing for landlords on 1 May 2026, but the security deposit rules are deliberately largely unchanged. The Tenant Fees Act 2019 framework — the five-week cap, scheme registration, prescribed information — survives the transition. What does change is the surrounding tenancy structure, and that affects how the deposit interacts with everything else.

Here is what you actually need to do differently from 1 May 2026, and what you can keep doing the same way.

What stays the same

The cap. Security deposits remain capped at five weeks' rent where annual rent is below £50,000, and six weeks' rent above that threshold. To calculate, take the annual rent, divide by 52, and multiply by 5 (or 6).

Protection in an approved scheme. You still have 30 days from receipt of the deposit to register it with an approved scheme — currently the Deposit Protection Service (custodial), MyDeposits, or the Tenancy Deposit Scheme. Custodial schemes are free; insurance-backed schemes charge a fee but let you hold the money.

Prescribed information. You still have 30 days from receipt to give the tenant the prescribed information — scheme name and contact, scheme leaflet, deposit amount, property address, your name and address, dispute procedure, and a confirmation that the tenant has had the chance to sign the scheme certificate. Failure to serve prescribed information within 30 days exposes you to a penalty of one to three times the deposit, and blocks you from serving valid possession notices on most grounds.

The same dispute resolution. End-of-tenancy disputes still go through the scheme's adjudication service. The standard of evidence is unchanged: signed inventory, dated photos, contractor invoices.

What changes

No pet deposit on top. From 1 May 2026, you cannot ask for an additional deposit because the tenant has a pet. You also cannot require pet insurance. The five-week cap is the entire amount you can hold, regardless of whether the tenant has a pet, multiple pets, or no pet at all. You can include a clear contractual term that the tenant is responsible for damage caused by the pet, and you can recover that damage at end of tenancy in the normal way — but you cannot pre-fund it.

No "advance rent" workaround. Some landlords previously asked for several months of rent in advance instead of (or alongside) a deposit, particularly for higher-risk tenants. From 1 May 2026, advance rent is capped at one month, so the deposit and a guarantor are the only pre-tenancy financial protections you have. See our article on the rent in advance cap.

Periodic by default. All tenancies are periodic from 1 May 2026 — there is no fixed term. Practically this means there is no "end of fixed term" to settle the deposit against. Deposits are returned only when the tenancy ends, and tenancies can end on the tenant's two months' notice or by your service of a Section 8 notice on a valid ground. Plan for the possibility of a deposit refund being requested at any time, not just on a predictable end date.

Written statement first. You must give the tenant a Written Statement of Terms before the tenancy is signed, and the deposit amount must be stated in that document. This is one of the five mandatory fields: names of parties, property address, rent amount and frequency, start date, and deposit amount (or "NIL"). The fine for failing to provide a written statement is up to £7,000.

Common deposit mistakes that have always been costly

The new framework does not introduce new traps, but the old traps still bite — and the consequences are more severe in a periodic-by-default regime where you cannot rely on a fixed term to bridge a procedural gap.

The avoidable mistakes are:

• Taking the deposit on a Friday and registering it on Monday — counted as four days, no problem; taking it on the first of the month and registering it on the 31st is right at the cliff edge
• Serving prescribed information that omits the deposit certificate confirmation — a frequent reason adjudication panels rule against landlords
• Forgetting to re-serve prescribed information when a joint tenant is replaced
• Giving an oral receipt rather than a written one
• Holding the deposit personally and forgetting to insure it — the insurance-backed schemes only cover what they have actually been told about

At end of tenancy

When the tenancy ends, the deposit is returned in the normal way: agree deductions with the tenant, refer disputes to scheme adjudication, return the agreed sum within 10 days of agreement.

A practical point under the new regime: because the tenant can end the tenancy on two months' notice at any time, you may have less notice of an inspection date than you would have had under a fixed term. Build inventory check-out time into your standard process — and consider a mid-tenancy inspection for tenancies that have been running for more than 12 months.

For help with end-of-tenancy paperwork and the new written statement, see LegalDraft Pro.