Air source heat pump grants – a guide for landlords (2024)

Landlords can get a cash grant from the government towards replacing their boiler with a greener alternative. This includes an air source heat pump grant that can be used towards the cost of installing a more energy efficient system.

Read on to find out more about the boiler upgrade scheme and how you can apply for funding to make your property more energy efficient.

What is an air source heat pump – and how does it work?

An air source heat pump provides heating and cooling to homes by using electricity to transfer air to where it’s needed. It’s often described as a refrigerator in reverse.

In colder months, it takes air from outside the property and converts it into a fluid that’s heated, before distributing it throughout the home’s heating system.

In summer, air source heat pumps cool the property by extracting warm air from inside and taking it outside.

Heat pumps can also be used to heat water for taps and showers.

In winter and colder climates, the heat pump will need to work harder to heat the property as the air outside is cooler. This is important to bear in mind when looking at your options, so be sure to speak to an expert to find out the most efficient heating system for your property.

What about ground source heat pumps?

A ground source heat pump works in virtually the same way as an air source heat pump. The main difference is that it draws heat from the ground outside a building instead of the air.

It absorbs heat from the ground and converts it to water to distribute through radiators and underfloor heating systems. In summer, it can reverse this system to cool your house.

How much is an air source heat pump?

Air source heat pump costs vary and you could pay anything from £8,000 to £18,000 for installation, according to green energy products comparison website GreenMatch.

The size of the heat pump and any structural alterations to the property will affect the price you pay for installation.

Are you doing any other renovation work at the same time? This could be a chance to think about whether you want to replace your radiators or if you want to install underfloor heating (although this all adds to the cost).

It’s a good idea to research both private installers and energy companies to get several quotes for installing a heat pump.

Heat pump cost calculator – compare quotes

GreenMatch has a simple quote form that lets you compare prices for up to three products to help you work out the cost of installing a heat pump on your buy-to-let property.

GreenMatch also highlights average costs of other energy efficient heating systems:

  • a biomass boiler is likely to cost between £4,000 and £21,000

  • ground source heat pump costs start at £20,000 and can be up to £35,000

Do heat pumps need planning permission?

Generally no. The main reasons you'd need to apply for planning permission to install a heat pump for your property is if:

  • there’s already a heat pump on the building or block of flats, or in the grounds

  • the volume of the pump’s outdoor compressor unit is greater than 0.6 cubic metres

  • it’s within one metre of the boundary of the property

  • it’s installed on a pitched roof

Planning regulations are devolved responsibilities in Scotland, Wales, and Northern Ireland. Always check with your local planning authority if you’re not sure of anything before doing any work.

Popularity sparked by the cost of living crisis

Rising energy bills and increased pressure on other costs has seen heat pumps surge in popularity as a more efficient and cheaper alternative. In fact, Google Trends data shows a sharp increase in people searching for the term as the cost of living crisis deepened and Ofgem increased the energy price cap in April 2022.

Air source heat pump grants – a guide for landlords (1)

Air source heat pump grants – a guide for landlords (2)

Google Trends data shows searches for 'heat pumps' from December 2021 to August 2023

And with government legislation setting out to achieve 600,000 heat pump installations a year by 2028, is now the time to upgrade your buy-to-let property’s heating system?

What is the boiler upgrade scheme?

As part of its Heat and Buildings Strategy, the government is giving away grants of up to £6,000 to homeowners in England and Wales.

The boiler upgrade scheme aims to encourage property owners to replace existing gas boilers with low carbon heating systems such as air source heat pumps, biomass boilers, and ground source heat pumps.

Details of the boiler replacement scheme were first announced in the 2021 Autumn Budget. It officially launched in April 2022 and is open to homeowners in England and Wales, including private landlords, until 2025.

Read more: financial support available for insulating a property.

Heat pump grants for England and Wales

As a property owner, you can claim the upfront cost of a boiler alternative that uses low carbon heating technology.

These are the current grants available with the boiler upgrade scheme in England and Wales:

  • £5,000 biomass boiler grant towards the cost and installation

  • £5,000 grant towards the cost and installation of an air source heat pump

  • £6,000 off the cost and installation of a ground source heat pump

Boiler upgrade scheme eligibility criteria

To benefit from the boiler upgrade scheme grant, your new heating system needs to meet the following criteria:

  • the heating system must have been installed after 1 April 2022

  • it needs to meet the heating and hot water requirements of your property

  • it must have replaced an existing oil, gas, or electric heating system

  • it must meet minimum efficiency requirements and other technical standards that your installer will know about

Boiler grants for landlords – what do you need to know?

You can claim one grant for every property you own, even if you’ve previously benefited from other energy efficiency upgrades through a scheme like the green homes grant.

However, you can’t get a grant if your Energy Performance Certificate (EPC) has outstanding recommendations for cavity wall or loft insulation, or if you’ve already used government funding to buy a heat pump or biomass boiler.

It’s important to note that the scheme doesn’t apply to new build properties and there’s no funding to replace low carbon heating systems if you already have one.

Heat pump installation in Scotland – grants and how to apply

If your property is in Scotland then you may be able to get funding to install a heat pump through the Home Energy Scotland Grant and Loan.

There are grants and interest-free loans available for energy efficiency improvements. Specifically for heat pumps, you could get a grant of up to £7,500 (or £9,000 for properties in the remote uplift area).

Other financial support available includes loans for energy efficiency improvements, such as insulation.

Home Energy Scotland also has specific guidance for landlords when it comes to making homes more energy efficient.

Grants for properties in Northern Ireland

There’s also a boiler replacement scheme for properties in Northern Ireland where you can apply for a grant of up to £1,000.

This can’t be used towards a heat pump, but can be used to upgrade an inefficient boiler for a more efficient condensing oil or gas boiler.

Eligibility criteria:

  • for households with gross income of less than £40,000

  • you must have an inefficient boiler that’s at least 15 years old

How can landlords get funding for a boiler replacement?

If you want to apply for a boiler replacement grant, the first thing you’ll need to do is find an MCS-certified installer who can do the work. MCS is a standards organisation for low carbon products and installations.

You can contact installers through the MCS website and the government recommends getting quotes from several contractors. The Energy Saving Trust also has an interactive tool to help you find installers and read reviews.

Your installer will be able to explain the benefits of the different boiler replacement options and which one is most suitable for your property.

How to apply for your grant

Once you’ve found an installer, decided which heating system you want, and agreed a quote, you’ll need to follow these steps (for properties in England and Wales):

  • the installer will apply for the grant, the value of which will be taken off the final price you pay

  • you’ll be contacted by Ofgem and you’ll need to confirm that the installer is working on your behalf

  • once installation is underway, Ofgem might contact you or request to visit the property

The process is slightly different for grants in Scotland as you’ll need to apply for the grant and complete an application form yourself. Your installer won’t be able to do this for you.

Changes to EPC regulations on the horizon

Replacing an old boiler with a greener alternative could increase the energy efficiency of a property, helping landlords to comply with Minimum Energy Efficiency Standards (MEES).

Currently a property can’t be let to tenants unless it has an EPC rating of E or above.

Although it’s not been confirmed, the government is expected to increase the minimum EPC rating for rental properties to C for new tenancies in 2025 and existing tenancies in 2028. This is part of the Minimum Energy Performance of Buildings Bill currently working its way through parliament.

55% of landlords need to make energy efficiency improvements…

A Simply Business survey of almost 600 landlords found that over half of landlords would need to improve their property’s energy efficiency if the minimum EPC rating was increased to C.

Of these, one in five (19 per cent) said they’d have to spend over £10,000 on improvements, with a further 27 per cent anticipating costs of £5,000 and £10,000.

Meanwhile, almost a third of landlords (32 per cent) say making properties energy efficient is a key challenge in 2022.

…but should landlords install an air source heat pump?

While the initial cost of installing a heat pump is high, the system is more energy efficient, lasts longer, and needs less maintenance.

What’s more, replacing an old gas boiler with a greener alternative could also help to reduce energy costs. According to GreenMatch, a heat pump could reduce annual energy bills by more than a quarter (26 per cent) compared to a new gas boiler. Read more about the running costs and performance of heat pumps.

Significant savings on bills

Landlords who offer bills-included tenancies could make significant savings on bills if their properties used less energy.

On the other hand, landlords who don’t pay for their tenants’ energy bills could still benefit from reducing energy consumption. Tenants may be willing to stay longer or pay slightly more rent if they know their monthly energy bills will be lower.

Energy efficient upgrades like heat pumps could also increase the value of your property and you may even be able to access additional funding through your mortgage. Several high street lenders offer green mortgages or additional borrowing opportunities to fund upgrades – so it’s worth looking into this if you’re looking to remortgage.

Final thoughts

EPC changes, expensive gas prices, and increasing pressure to meet net zero targets mean now could be a good time to start considering your options. While the initial cost of making energy improvements to your rental property can be high, you’re likely to see returns in the long run. And landlord boiler grants available now could make this more affordable.

Are you looking for an air source heat pump grant or other ways to update the energy efficiency for your rental property? Let us know in the comments below.

More guides and resources for buy-to-let landlords

  • Is now a good time to buy a house?

  • Landlord boiler responsibilities and boiler maintenance

  • Rental reforms published – what do landlords need to know?

  • What is landlord insurance?

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Air source heat pump grants – a guide for landlords (2024)


How do I get an air source heat pump grant? ›

All homeowners, small landlords, and private landlords will be eligible to apply for the grant. However, all applicants must have a valid Energy Performance Certificate (EPC) – typically one which has been issued in the last 10 years – with no outstanding recommendations for loft or cavity wall insulation.

Are grant air source heat pumps any good? ›

Grant's product is the cheapest high-quality heat pump around, yet its peak efficiency rating is still an astounding 479%, meaning it produces 4.79 units of heat for every unit of electricity it uses.

Why not to buy a air source heat pump? ›

Air source heat pumps can experience issues such as icing in cold temperatures, which can ultimately damage the system. Although modern heat pumps do often have automatic defrosting. Their efficiency will also be lower at very cold temperatures, and use more electricity during those cold days.

What is the major disadvantage of a heat pump system? ›

Reduced efficiency in cold weather: Effectively extracting thermal energy from outdoor air becomes increasingly difficult as the temperature drops. To overcome this, heat pumps feature a far less efficient backup electric heating element.

How much is a grant air source heat pump? ›

You can get one grant per property. Grants are available for: £5,000 towards an air source heat pump.

How much does a heat pump cost to buy and install? ›

On average, the supply and installation of an air source heat pump will cost in the region of £2,000-£20,000. Air-to-water is the more expensive option, costing an average of £15,000 for supply and installation. Air-to-air on the other hand is around £3,000 for supply and installation.

Why is my air source heat pump so expensive? ›

Limited Production. As for many products in the early stages of the product life cycle, Heat pumps are produced in limited quantities as they are not yet as widely used as traditional heating systems. Whilst smaller units are being produced by manufacturers, this can drive higher costs for consumers.

What is the most economical way to run an air source heat pump? ›

For the most cost effective results, set your pump up to provide heat at a lower temperature over a longer period of time. 4. Ensure your home is well insulated to trap the heat that is produced and always close windows and doors when the system is in use.

How long do air source heat pumps last? ›

Long Lifespan: Air source heat pumps have a long lifespan, with proper maintenance, they can operate for up to 20 years and most have 5-year warranties. Some models are even capable of working efficiently for close to 25 years.

Why heat pumps are not the future? ›

Building infrastructure, natural gas vs. electric rates, and retrofit cost are issues limiting the broader adoption of heat pumps. Installation costs can be higher for existing buildings, where retroactively installing heat pumps can be difficult and require integration with existing systems.

Why are people against heat pumps? ›

Heat pumps loose their effectiveness (not to be confused with their efficiency) the colder it gets outside forcing you to either use the electric heat or stay cold. Systems that are designed poorly so the ductwork is too small resulting in a lot of air noise and drafts that is not as warm.

Are heat pumps worth it or just a lot of hot air? ›

Heat pumps are usually worth the investment. An air source heat pump will typically save you £1,840 over its lifetime, compared to a gas boiler – which means you can actually cut your costs by going green.

Who should not get a heat pump? ›

Heat pumps might struggle in drafty, poorly insulated homes. You might need to upgrade your electrical service to support whole-house electric heating. And it's possible that you'll want to keep (or add) a backup heating system just in case the weather gets so unusually cold that your heat pump can't keep up.

At what temperature are heat pumps not efficient? ›

Heat pumps do not operate as efficiently when temperatures drop to between 25 and 40 degrees Fahrenheit for most systems. A heat pump works best when the temperature is above 40. Once outdoor temperatures drop to 40 degrees, heat pumps start losing efficiency, and they consume more energy to do their jobs.

What qualifications do you need for air source heat pumps? ›

To enrol on this Air Source Heat Pump installation course, you need to hold the following qualifications:
  • Level 2/3 SVQ or NVQ in plumbing, heating/ventilation gas or oil.
  • WRAS Water Regulations, which can be completed alongside your ASHP qualification if necessary.

How much cheaper to run is an air source heat pump? ›

On average, you can expect that the cost of running an air source heat pump for heating will be no more or no less than a gas heating system. While running an air source heat pump may not be cheaper or more expensive, the main benefit to many lies in using a renewable energy source to heat your home.

Can I install my own air source heat pump? ›

Installing an air source heat pump is not a job that should be attempted by anybody other than a qualified professional. It is possible that some parts of the pipework could be fitted by a competent DIYer looking to minimise costs, as long as they follow the design laid out by the system designer.

What is the West Virginia heat pump rebate? ›

Eligible customers are able to receive up to $700 ($900 for low-income customers) when they hire a qualified contractor to replace their current, non-regulated fuel source furnace with a high-efficiency electric heat pump.

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