Who Pays for a Heat Pump: Landlord or Tenant?

The short answer

The landlord pays for the installation. The tenant normally pays for the electricity. That is the default split in most lets, and a heat pump does not change it. What changes is the size of the bill, and that can move either way.

Two things sit outside that default. The grant can only be claimed by the owner, and the rent rules decide whether a landlord can recover any of the cost from the tenant.

Who pays for the install

The landlord does. A typical air source heat pump costs around £12,000 before any grant, according to the Energy Saving Trust (page updated 23 September 2026). The government’s median installed cost for a grant funded air to water heat pump in 2026 Q2 was £12,908, and that figure includes the grant value.

Those are averages for the market, not a quote for your property. A flat with a small heat demand and a large detached house with solid walls sit at opposite ends of the range.

Who can claim the grant

Only the owner. The Boiler Upgrade Scheme pays £7,500 towards an air source or ground source heat pump, and GOV.UK says you must own the property you are applying for, “including a property you rent out to tenants”. The installer applies on the owner’s behalf, and the installer must be MCS certified. There is one grant per property, and the system must replace an existing fossil fuel heating system.

A tenant cannot claim it, and a landlord cannot claim it for a property that has already received government funding for a heat pump or biomass boiler. For the full rules see the Boiler Upgrade Scheme for landlords page.

There is also the Warm Homes: Local Grant in England, run through local authorities for lower income households in EPC D to G homes. A landlord’s first property can be fully funded, and from the second property the landlord pays 50%. Landlords have to declare that they will not raise the rent because of the funded work. Check the Local Grant page before assuming a property qualifies.

What the tenant pays

The energy bills, unless the tenancy says otherwise. Under the Ofgem price cap from 1 October to 31 December 2026, electricity is 26.32p per kWh and mains gas is 7.97p per kWh. Electricity is about three and a third times the price of gas per unit, which is why a heat pump has to be efficient to break even.

That efficiency is measured by the seasonal coefficient of performance (SCOP). A SCOP of 3.0 means 3 units of heat for each unit of electricity.

Worked example (modelled, not a real project)

Inputs: a three bedroom semi that needs 12,000kWh of heat a year (the illustrative figure used across this site), a gas boiler at 90% efficiency, and the Ofgem cap unit rates above. Standing charges are left out. All figures are modelled and rounded.

Heating	Energy used	Yearly cost
Gas boiler, 90%	13,333kWh gas	£1,063
Heat pump, SCOP 3.0	4,000kWh electricity	£1,053
Heat pump, SCOP 3.5	3,429kWh electricity	£902

At SCOP 3.0 the tenant’s bill is almost unchanged. At SCOP 3.5 it falls by about £160 a year. A system running below SCOP 3.0 would cost the tenant more than the boiler did.

If the gas supply is disconnected altogether, the gas standing charge of 29.68p a day, about £108 a year, stops. That is a small extra saving, not a reason to proceed on its own.

The landlord’s side of the same example: £12,000 less the £7,500 grant leaves about £4,500 to find. The tenant gets any bill saving. The landlord gets a property that is warmer to let, possibly a higher EPC band (see whether heat pumps improve EPC ratings), and less exposure to the planned EPC C rule. Whether that is worth £4,500 is the question the landlord calculator is built to test.

Can the landlord recover the cost through rent?

Possibly in part, but nothing in the government landlord guide read for this page says a heat pump justifies a rise. From 1 May 2026 in England, rent can be raised once a year, with at least two months’ written notice, and the First-tier Tribunal can resolve disputes over an increase. A rise has to stand on the market rent for the home, which is a judgement, not a formula.

Do not build a business case that depends on a rent rise you have not tested. If the work is funded through the Local Grant, you have already agreed not to raise the rent because of it.

When this is NOT the right answer

If the tenant would pay more to heat the home and the landlord gets no grant, nobody wins. That is the case for a poorly insulated home on a low efficiency heat pump with the full price cap electricity rate. In that situation, insulation or a like for like boiler may be the sounder choice, and a heat pump can wait until the fabric is improved.

Also treat any “the tenant will save money” claim with suspicion until you have seen a heat loss calculation and a stated SCOP for the actual house.

Next step

Put your own numbers in the heat pump landlord calculator, or send an enquiry and relevant independent firms contact you, no charge to you and no obligation, via the quote page.

This is general information, not financial advice. Rules and prices change; the dates and figures above were read from the sources listed on 8 October 2026.