Our estate agent is trying to use my and my housemates security deposits to pay off one person's unpaid rent?

I advise you to read over your contract carefully and be absolutely certain that that there is no provision allowing what your estate agent threatens to do. If your contracts were indeed separate, your estate agent is full of it and cannot take that action legally. If it were me in your position, I'd request that the agent show you where in your contract the action is allowed; if the agent could not, I'd inform the agent that if the illegal action is attempted, I'd fight it in court.