Heat pumps for landlords: FAQs

At least band E. Landlords cannot let or continue to let a property covered by the Minimum Energy Efficiency Standards regulations if it is rated below E, unless a valid exemption is registered. Current improvement spending is capped at £3,500 (including VAT) per property.

The government's response of 21 January 2026 says all in-scope private tenancies in England and Wales must meet EPC C by 1 October 2030, unless a valid exemption applies. A statutory instrument is expected in 2027, so the rule is planned, not yet law.

Up to £10,000 per property, counting qualifying work installed since 1 October 2025. For properties valued below £100,000 the cap is the lower of £10,000 or 10% of the property's value. The government's impact assessment estimated an average of £5,400 per property.

After spending the cap, a landlord can register an exemption that lasts 10 years. Further exemptions are planned for cases where measures would damage the building and for solid walls, and some existing exemptions are retained. The exact list depends on the final regulations.

Under today's rules the maximum total fine is £5,000 per property. The planned regime lets local authorities issue a maximum penalty of £30,000 per breach, per property. Do not confuse this with the separate landlord electrical safety penalty, which is now £40,000.

The government response says short-term lets will not be within scope of the private rented sector regulations. Check the final regulations for the exact definition.

The published plan covers England and Wales. Scotland has its own legislation and timetable. The Renters' Rights Act is England-only, so Welsh landlords follow different tenancy law.

Yes. GOV.UK says you must own the property you are applying for, including a property you rent out to tenants. The grant is £7,500 for an air-to-water or ground source heat pump. Social housing, most new builds and properties that have already had government funding for a heat pump are excluded.

Yes, £9,000 where the property uses oil or LPG heating and has no mains gas connection, until 31 March 2027. An off-gas property heated by direct electricity gets £7,500.

No, under published policy. The government response of January 2026 says Boiler Upgrade Scheme funding will not count toward the £10,000 cap, while other third-party funding, including other government schemes, can. The regulations were not yet laid when this answer was checked, so the final rule may differ.

The Warm Homes: Local Grant is for lower-income tenants and owner-occupiers in England in homes rated EPC D to G, delivered by councils. A landlord's first property can be fully funded; from the second property the landlord contributes 50%. Landlords declare they will not raise the rent because of the funded work. Greater Manchester and West Midlands combined authority areas (including Manchester, Birmingham and Coventry) are outside the national scheme and set their own landlord terms.

The Warm Homes Loan Scheme is open to private rented sector landlords as well as owner-occupiers. A heat pump loan can be up to £20,000. Government pays lenders up to 20% of the loan, which must be passed on by lowering the nominal interest rate. The rules do not promise a zero rate.

Installing a heat pump in a home is zero-rated until 31 March 2027; the rate is 5% from 1 April 2027 (VAT Notice 708/6).

The Energy Saving Trust gives around £12,000 before grant for an air source heat pump. After the £7,500 grant the net cost for a typical system is roughly £4,500. Flats and small terraces cost less; large or poorly insulated houses cost more.

It can, but the rating also depends on the fabric of the building. The planned standard scores fabric performance first and then offers a choice of a heating-system standard or a smart-readiness standard. Insulation is often the cheaper first step.

Usually not. Loft insulation, draught-proofing and cavity wall insulation cost far less. A heat pump makes most sense when the boiler is failing, when the property is heated by oil, LPG or direct electricity, or when the fabric is already reasonable.

Sometimes. A heat pump runs at a lower flow temperature than a gas boiler, so undersized radiators may need replacing or upgrading. The installer's heat-loss calculation, not a rule of thumb, should decide.

No. GOV.UK says the Boiler Upgrade Scheme cannot fund hybrid systems, such as a gas boiler combined with a heat pump.

Air-to-air heat pumps are funded at £2,500 under the Boiler Upgrade Scheme for homes, and must replace existing heating. They heat and cool rooms with indoor units rather than radiators. Whether that suits a tenancy depends on the layout.

Normally the tenant, through their own electricity account. That is why the design and the efficiency of the system matter: a heat pump that costs more to run than the boiler it replaced raises the tenant's bills.

On the Ofgem cap for 1 October to 31 December 2026, electricity is 26.32p per kWh and gas 7.97p per kWh. A heat pump delivers several units of heat for each unit of electricity, so it can still be cheaper to run, but only at a good seasonal efficiency.

The Renters' Rights Act changed how rent increases work in England from 1 May 2026, and this is not a point to guess at. Read the GOV.UK guide for landlords or take advice. The Warm Homes: Local Grant also asks landlords to declare they will not raise the rent because of the funded work.

The grant does not require it, but you will need access to the property and to arrange the work with the tenant. Leasehold flats and listed buildings may need consent from the freeholder or the council. Between lets is the easiest time.

Heat pump installers claiming the Boiler Upgrade Scheme grant must be MCS-certified. Look the firm up on the MCS website and, for TrustMark registration, on the TrustMark website, before you sign anything.

No. It is an independent guide published by SEO-DONS LTD (company number 16766013). It cannot approve a grant, and it does not install or survey anything.