If the Landlord Accepts the Application
If the landlord accepts the application, the holding deposit is placed towards the first month's rent payment upon successful contract signing. In other words, the tenant gets the full holding deposit back, and it is put straight towards paying the first month's rent. The tenant will see this when all parties have signed the contract and they are sent a link to make the final payment towards the security deposit and the first month's rent.
If the Landlord Rejects the Application
If the landlord makes a decision not to proceed (for example, the tenants fail referencing), the full amount is returned to the tenants.
If the Tenants Pull out of the Application
If the tenant(s) decide that they no longer want to rent the property then the landlord may have grounds to claim it under the Tenant Fees Act (2019).
Placing a holding deposit is meant to show that a tenant is serious about renting the property in question, so tenants must make sure only to place one if they definitely want to rent the property! If they pull out after placing it, or if an unreasonable amount of time has passed with no tenant contact, the money will go to the landlord to cover the costs they face by taking their property off the market in order to pursue the application.