Any experts on tenancy law in the UK reading this? (Almost certainly not, alas, but I can hope.) My university-student daughter is getting treated badly by a letting agency -- I am aware that this is not exactly shocking news -- and one aspect of the relevant law looks severely broken to me.

Suppose landlord L has a property to let and prospective tenant T is interested. Then the following process is common. L requires T to pay a _holding deposit_ (and isn't allowed to have more than one T's holding deposit at once); once everyone's decided to move forward, L and T sign the tenancy agreement and T gets their holding deposit back and pays L a larger _tenancy deposit_; eventually T moves in and starts paying rent; even more eventually T moves out and the tenancy deposit is returned.

There are strict rules about a holding deposit. It can't be more than one week's rent and L has to pay it back within 7 days if they decide not to go ahead.

What this letting agency has done, which so far as I can tell _isn't strictly illegal_ though it obviously should be, is: require that T pay the _tenancy deposit_ before signing anything.

If this is legal then all the rules about holding deposits have _no effect_ because tenancy deposits are allowed to be bigger and the landlord can keep them for longer.

Relevant bits of law sometimes kinda-sorta seem to assume that if a tenancy deposit has been paid then an actual tenancy is happening but I can't find anything that makes it illegal to require it before that.

Am I missing something?