Letting agency dispute?

I was going to take an apartment from an agent. They asked for a holding deposit of 200 quid, i paid it then took the paperwork away. Reading the paperwork I discovered I didn't earn enough to cover their minimum (even though my salary more than covers the rent). This made me insecure about the tenancy. When I tried to hand in the paperwork they saw that I earnt less and said I would have to complete a reference check, at this point I found somewhere else and decided to withdraw. They are now saying they will not return the holding fee, even though in their terms and conditions I could not meet their stipulations anyway - so the lease could not have ever gone through. They offered to give me half back then changed their mind. I am considering taking them to small claims, or reporting them to the ombudsman. Any advice on whether I can get this back? I did not sign the lease, or fill a reference check - but I feel they should have pointed out the minimum annual salary before they took my holding fee. They also only mentioned the length of the tenancy after taking the fee.I feel they have acted unprofessionally throughout.