Grants and funding for heat pumps for landlords

Funding a heat pump as a landlord is more generous than most people assume, but the routes depend entirely on whether the property counts as domestic or commercial. Get that distinction right and the numbers work. Get it wrong and you chase grants you were never eligible for. The single most important fact for landlords is that the Boiler Upgrade Scheme, the headline £7,500 grant, is open to you for your rented homes, not just to owner-occupiers.

The Boiler Upgrade Scheme is the main route for rented homes

For a standard rented house or flat, the Boiler Upgrade Scheme is the grant that matters. It pays £7,500 towards an air-source or ground-source heat pump in a domestic property in England or Wales, for systems up to 45kW thermal, which covers almost every individual home. Landlords are explicitly eligible. The property needs a valid EPC with no outstanding recommendations for loft or cavity wall insulation, which is one reason we usually pair the heat pump with any fabric work the EPC flags. The installer must be MCS certified and claims the grant on your behalf, deducting it from your invoice, so you only ever pay the net amount. There is no cap on the number of properties, so a landlord can claim the grant once for each eligible home in the portfolio.

Capital allowances on top, if you hold through a company

If you let property through a limited company, the heat pump counts as qualifying plant and machinery, so you can set its cost against corporation tax through capital allowances. Full expensing gives companies a 100% first-year deduction with no upper cap, made permanent from April 2026, while unincorporated landlords use the Annual Investment Allowance, up to £1m of qualifying spend at 100%. For a company at the 25% corporation-tax rate that is worth up to 25p of tax saved per £1 spent, and it stacks with the Boiler Upgrade Scheme on domestic plant. Wiring and ancillary works may fall outside full expensing but often qualify for the Annual Investment Allowance. Always confirm the treatment with your accountant, because how the property is held changes everything.

Where the commercial funds come in

Once a system goes above 45kW thermal, or the building is genuinely non-domestic, the Boiler Upgrade Scheme no longer applies and the larger commercial routes open up. These are most relevant to landlords with big communal blocks, mixed-use buildings, or commercial premises in the portfolio.

The Public Sector Decarbonisation Scheme funds low-carbon heating in public-sector buildings, schools, NHS sites, councils, and registered providers of social housing, which is relevant if you work with public-sector or housing-association partners rather than to a private landlord directly. The Industrial Energy Transformation Fund supports fuel-switching to industrial heat pumps on eligible industrial sites, and the Green Heat Network Fund covers up to 50% of eligible costs for multi-building heat networks, which can suit a large estate or campus-scale landlord connecting several blocks to shared low-carbon plant.

How the routes stack

For a portfolio of ordinary rented houses, the stack is simple: claim the Boiler Upgrade Scheme on each domestic property, and if you hold through a company, claim capital allowances on top. For a large communal block above 45kW, the grant drops out and you rely on capital allowances, with a heat network connection or the Green Heat Network Fund worth exploring if several buildings can share plant. You cannot claim the Boiler Upgrade Scheme and a commercial grant on the same plant, so the system size effectively decides which route you are on.

Common pitfalls landlords hit

The most frequent mistake is assuming there is no funding for landlords at all, when in fact the £7,500 grant is open to you for every eligible home. The second is having outstanding insulation recommendations on the EPC, which can block the grant, so we check and address those first. The third is leaving it too late: the Boiler Upgrade Scheme is a government-funded programme that has been extended but is not guaranteed forever, so converting at boiler replacement while the grant is available is the lower-risk path. The fourth is using a non-MCS installer, which makes the grant impossible to claim. We handle the MCS certification and the grant paperwork as standard, so the funding is built into the proposal rather than left for you to chase.

What you need to provide

To get a funded quote moving we need the property's EPC, recent heating bills or fuel consumption where available, and a few photographs of the existing boiler, radiators, and the proposed external unit location. From that we can confirm eligibility, model the running cost, and tell you the net cost after grant before you commit. The funding routes below are the current UK schemes; we map the right combination for your specific properties.