Grants for landlords: every heat pump and energy efficiency funding route
The routes side by side
Four forms of help exist for a landlord, plus a tax rate: a direct grant, a council funded scheme, a loan and a supplier scheme that is about to close. Each has a different test, so the right one depends on the property and the tenant. This page compares them. The detail sits on the three pages it links to.
| Boiler Upgrade Scheme | Warm Homes: Local Grant | Warm Homes Loan Scheme | ECO4 | |
|---|---|---|---|---|
| Type | Grant | Grant via council | Loan from a lender | Supplier funded |
| Amount | £7,500; £9,000 on oil or LPG with no mains gas; £2,500 air to air | First property fully funded, then 50% landlord share; caps £16,600 + £16,600 as project averages | Up to £20,000 air source, £10,000 air to air, £35,000 ground source | Depends on measure |
| Who qualifies | Owner of the property, including a let one | Low-income tenant, EPC D to G | Private landlords, no income threshold | Tenant qualifies; owner’s permission |
| Where | England and Wales | England only | UK domestic property | Check supplier |
| Who applies | The installer | The council with you | You, to a lender | Council or supplier |
| Ends | See GOV.UK; uplift to 31 March 2027 | Window closes 31 March 2028 | Phased launch from September 2026 | 31 December 2026 |
Which route to read first
Off gas rental on oil or LPG: start with the Boiler Upgrade Scheme. The £9,000 figure applies only where oil or LPG is replaced and there is no mains gas connection. See the Boiler Upgrade Scheme for landlords.
Mains gas rental with a low-income tenant: start with the council scheme. The first property is fully funded and the landlord declares no rent rise because of the work. See Warm Homes: Local Grant for landlords.
Rental with a failing boiler and no heat pump plan: read landlord boiler grants. It says plainly that no scheme funds a new gas or oil boiler.
Not sure whether it adds up: use the heat pump landlord calculator and the cost guide.
How the main grant compares in practice
The Boiler Upgrade Scheme is open to any owner, whatever the tenant earns. The installer handles the application and must install within 120 days. It excludes social housing, most new builds and properties already funded for a heat pump or biomass boiler, and it does not fund hybrids.
The council route has more conditions and can deliver more. The first property can have both energy performance work and a heat pump covered, but the tenant must qualify on income, the EPC must be D to G, and councils decide what is installed. F and G rated rentals need a registered exemption first.
Loan and tax
The Warm Homes Loan Scheme is a loan, and the lender assesses affordability. The government pays lenders up to 20% of the loan, which must be passed on as a lower rate, and the rules do not promise a zero rate. HMRC lists a 0% VAT rate on installing heat pumps and insulation in homes until 31 March 2027, rising to 5% on 1 April 2027.
The cost still matters more than the grant
Grants shorten the payback only if the system is right for the house. A typical air source heat pump is around £12,000 before any grant, per the Energy Saving Trust. DESNZ statistics put the median installed cost of a Boiler Upgrade Scheme air to water heat pump at £12,908 in 2026 Q2, including the grant value. Running costs at the cap are 26.32p/kWh for electricity and 7.97p/kWh for gas, so a mains gas home with a poor heat pump efficiency can see higher bills. The cost page walks through it.
Worked example (modelled, not a real project)
The same assumed £12,000 air source heat pump (the Energy Saving Trust “around £12,000” figure) under three funding situations. Real quotes will differ, and extras such as a new cylinder or radiators are not included.
| Situation | Grant | Left to fund | Where it could come from |
|---|---|---|---|
| Mains gas let, Boiler Upgrade Scheme | £7,500 | £4,500 | Your funds, or a lender loan |
| Oil or LPG let with no mains gas | £9,000 | £3,000 | Your funds, or a lender loan |
| Low-income tenant, council scheme, first property | Set by the council’s package | Nil for the landlord on the first property | Council grant |
The loan route fits the first two rows. A lender may lend up to £20,000 for an air source heat pump, before the Boiler Upgrade Scheme grant is deducted, so a £4,500 balance sits comfortably inside the cap. Whether you are approved, and at what rate, is the lender’s decision.
The third row is not a promise. The council chooses the package and the tenant must pass the income test, so the heat pump may not be what the council funds.
A sensible order of operations
- Check the property’s EPC on the national register and read the recommendations.
- Check whether the home has a mains gas connection, and what the tenant’s household situation is.
- Ask your council whether it delivers Warm Homes: Local Grant, if the tenant may qualify.
- If it does not, or the tenant is outside the criteria, get quotes from MCS certified firms checked on the MCS register.
- Ask the installer to apply for the Boiler Upgrade Scheme and to show the grant deducted on the quote.
- Plan access with the tenant, and check the 120 day window before the application goes in.
Doing the checks first avoids paying for work that a scheme would then reject.
Funding and the minimum EPC rules
Today a let property in England and Wales needs a minimum EPC of E, and the cost cap for improvements is £3,500 including VAT. The planned rule is EPC C by 1 October 2030 with a £10,000 cap per property, subject to regulations expected in 2027. Funding does not alter those rules, and a funded EPC F or G property still needs its exemption. The cost cap and exemptions guide explains it.
When a grant is not the answer
If the home needs insulation first, a grant for a heat pump may be money in the wrong order. If the tenant is happy and the gas boiler works, doing nothing yet can be sensible. If the numbers only work with a grant that has a fixed deadline, treat the deadline as a prompt to check the sums, not as a reason to commit.
Next step
Try the heat pump landlord calculator, or send an enquiry on the quote page and relevant independent firms contact you. There is no charge to you and no obligation.
Before you build a plan around a grant
Surely the grant makes a heat pump a good deal?
It lowers the cost to install, not the cost to run. Energy Saving Trust puts a typical air source heat pump at around £12,000 before the grant, and at the Ofgem cap electricity is 26.32p/kWh against 7.97p/kWh for gas. Check the sums on the cost page before assuming a grant makes the case.
Do I need to claim before the rules change?
Not automatically. Real dates exist, such as 31 March 2027 for the oil and LPG uplift and 0% VAT, and 31 December 2026 for ECO4, but a poor installation to catch a date is a worse outcome than missing it. Decide on the property first.
How the cost gets met
Most landlords end up combining a grant with their own money. These are the routes, with the condition attached to each:
- Boiler Upgrade Scheme: £7,500 towards an air-to-water or ground source heat pump, or £9,000 where oil or LPG heating is replaced in a home with no mains gas connection (until 31 March 2027); £2,500 for an air-to-air system. One grant per property, and landlords can apply as the owner.
- Warm Homes: Local Grant: for lower-income tenants in England in homes rated EPC D to G, through the council. 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.
- Warm Homes Loan Scheme: a lender's loan, not a grant, open to private landlords. 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.
- 0% VAT until 31 March 2027: installing heat pumps and insulation in homes is zero-rated until then, and 5% applies from 1 April 2027 (VAT Notice 708/6).
- Your own funds or borrowing: how an upgrade is treated for tax depends on the property and the work. This site does not give tax advice, so ask an accountant before you commit.
The dates that matter
No countdown clocks here: only the fixed dates in the published guidance, and what each one means for a landlord.
- 31 December 2026ECO4, the supplier-funded scheme, closes after its extension. If a tenant on a low income might qualify, ask about it before then.
- 31 March 2027The extra £1,500 Boiler Upgrade Scheme uplift for oil or LPG heating in a home with no mains gas connection ends, taking the grant from £9,000 back to £7,500. Zero-rated VAT on installing heat pumps and insulation also ends on the same date and 5% applies from 1 April 2027.
- 2027A statutory instrument is expected to come into force in 2027; the regulations had not been laid at the time of the government response.
- 1 October 2029A property rated EPC C or above on the Energy Efficiency Rating on an EPC lodged before 1 October 2029 stays compliant until that EPC expires.
- 1 October 2030All in-scope tenancies must meet EPC C, or hold a valid exemption, under the government's published plan.
Questions landlords ask
What grants are available to landlords for heat pumps?
The Boiler Upgrade Scheme (£7,500 for an air source or ground source heat pump, £9,000 on oil or LPG with no mains gas) and, in England, council delivered Warm Homes: Local Grant where a low-income tenant qualifies. Details are on the Boiler Upgrade Scheme page and the Warm Homes page.
Can I combine the Boiler Upgrade Scheme with other support?
The Boiler Upgrade Scheme excludes properties that have already been given government funding for a heat pump or biomass boiler. The Warm Homes Loan Scheme rules do say a loan can cover costs above a Boiler Upgrade Scheme grant. Ask the scheme administrator about any other combination.
Is there a grant for a gas boiler for a rental?
Not one we could verify. See the landlord boiler grants page.
Does grant funding count towards the EPC cost cap?
Under the planned rules, the government response of 21 January 2026 says Boiler Upgrade Scheme funding will not count towards the £10,000 cap and other government scheme funding can. The regulations are not yet laid, so the final rule may differ. See the cost cap page.
Do grants apply in Wales and Scotland?
The Boiler Upgrade Scheme covers England and Wales. Warm Homes: Local Grant funds households in England only. Scottish landlords should check Scottish Government schemes.
Sources
- GOV.UK, Apply for the Boiler Upgrade Scheme: check if you are eligible (read 8 October 2026)
- GOV.UK, Apply for the Boiler Upgrade Scheme: what you can get (read 8 October 2026)
- DESNZ, Warm Homes: Local Grant policy guidance for local authorities (updated June 2026; GOV.UK update 2 July 2026) (read 7 October 2026)
- DESNZ, Warm Homes Loan Scheme: scheme rules (September 2026) (read 7 October 2026)
- Ofgem, Energy Company Obligation (ECO4): scheme closing date (read 28 September 2026)
- HMRC, VAT Notice 708/6: energy-saving materials and heating equipment (read 7 October 2026)
- Energy Saving Trust, Air source heat pumps (page updated 23 September 2026) (read 28 September 2026)
- Ofgem, Energy price cap unit rates and standing charges (1 October to 31 December 2026) (read 8 October 2026)
- DESNZ/MHCLG, Improving the energy performance of privately rented homes: 2025 update - government response (published 21 January 2026) (read 8 October 2026)
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