Blousie's right: he's trying it on. A lot of smaller agents/landlords do this in the hope that the tenant will just acquiesce and let them keep the whole deposit.
Everything Chompy says makes a lot of sense and could prove very useful to you when you write your response. And I do mean write. Get everything in writing (ideally a letter but email usually works) and make sure you keep a copy.

For guidelines on writing stinking formal letters, see the letter about halfway down the 'best of' on my profile. Apart from altering the names and numbers for anonymity's sake, it's a genuine article.
(LongJohnBaldry, Fri 15 Oct 2010, 14:21, Reply)