Heat pumps for landlords in Leicester

What Leicester’s census numbers say

Leicester has 37,437 privately rented households out of 127,389, which is 29.4% (2021 Census). That is slightly higher than Nottingham’s 28.6%. Owner-occupiers are 46.7% of households and social tenants 23.2%.

The property mix is the more useful number. Semi-detached homes are 36.4% (about 46,400 households), terraced homes 29.2% (about 37,200), flats 17.8% (about 22,700), detached 11.4%, and converted houses 3.0% (about 3,800). A city that is two thirds semis and terraces has plenty of straightforward air source candidates, but also a lot of older brick terraces where the fabric is the first question. A detached share of only 11.4% matters for planning: a house that is not detached is allowed one unit under the England planning rules, and two on a detached house.

These shares are for all households, not just rented ones, so use them as the backdrop and check your own address.

Gas, electric and almost no oil

Mains gas heats 74.0% of homes, about 94,300 households. Electric-only heating is 11.0%, about 14,000. District heating is 1.9%, about 2,400. No central heating is 1.9%. Oil is 0.0%.

Because oil and LPG are close to absent, the £9,000 off-gas Boiler Upgrade Scheme rate will almost never apply here. The grant is £7,500 for an air-to-water or ground source heat pump. The scheme requires replacement of a fossil fuel or direct electric heating system, so a landlord swapping electric panel heaters can qualify.

The 11.0% on electric heating is the best commercial case in the city, as the example shows.

Worked example (modelled, not a real project)

Inputs: a small two-bedroom terraced house using 8,000kWh of heat a year (an assumption; the fact sheet’s 12,000kWh is for a three-bedroom semi), October 2026 Ofgem price cap unit rates (electricity 26.32p, gas 7.97p per kWh), a gas boiler at 90% efficiency, direct electric heating at 100%, and a heat pump at SCOP 3.0 or 3.5. Standing charges are left out.

Heating	Fuel needed	Fuel cost a year
Direct electric heating	8,000kWh electricity	about £2,106
Gas boiler, 90%	8,889kWh gas	about £708
Heat pump, SCOP 3.0	2,667kWh electricity	about £702
Heat pump, SCOP 3.5	2,286kWh electricity	about £602

Against gas, the heat pump is level or about £100 cheaper to run at these prices. Against direct electric, it saves roughly £1,400 a year. For a wet system you also need radiators sized for low-temperature heat and a cylinder, so installed cost varies. The Energy Saving Trust gives around £12,000 for a typical air source heat pump before grant, so £4,500 after a £7,500 grant, before any extra work.

Terraces, flats and converted houses

Leicester’s 17.8% flats and 3.0% converted houses are the hardest segment for heat pumps. A flat has little outdoor space, a shared wall to neighbours and often a lease that needs the freeholder’s consent. The planning rules cap a compressor unit at 0.6 cubic metres on a block of flats, against 1.5 cubic metres on a house, and the noise limit is 37.0 dB(A). Air-to-air units are funded at £2,500 where they replace existing heating, which can suit a small flat, but they heat the air rather than a radiator circuit.

For the 29.2% of terraced homes, the usual limit is a tight rear yard and a neighbour close by. Measure the position before you ask for quotes.

Selective licensing in Leicester

Leicester City Council introduced selective licensing in October 2022 for parts of Braunstone Park and Rowley Fields, Fosse, Westcotes, Stoneygate and Saffron. If a property is in a licensing area it needs a licence, including small HMOs of two or more households with up to four people sharing. The council lists the licence at £1,290, paid in two parts, and says the scheme will be reviewed in October 2027.

For a heating project, the practical point is simple. Find out whether the address is inside an area before planning works. Ask the council whether a heating change affects the licence conditions.

EPC C and the 2030 plan

Today the legal minimum is EPC E with a cost cap of £3,500 including VAT. The government’s planned rule is EPC C by 1 October 2030 with a £10,000 cost cap, but the regulations are not yet laid. Read EPC C 2030 and your heating choice and the cost cap and exemptions before committing money on a guess.

Leicester City Council’s Climate Ready Leicester plan, published in September 2024, includes an action on ensuring private rented homes meet at least minimum levels of energy efficiency, and the council keeps its net zero 2030 ambition under review. It is a council plan, not a rule that binds you.

Grants and funding

• Boiler Upgrade Scheme: £7,500 for air-to-water or ground source. Landlords are eligible. See the landlord guide to the scheme.
• Warm Homes: Local Grant: GOV.UK lists Leicester as a recipient with £4,507,699 allocated. It is aimed at lower-income households with EPC D to G, and landlord terms include a declaration that rent will not rise because of the funded work. Read the Warm Homes Local Grant page.
• Warm Homes Loan Scheme: a lender loan, not a grant.

When a heat pump is the wrong answer

• A solid-wall terrace with thin loft insulation: insulate first.
• A top-floor flat where the freeholder will not consent or there is nowhere for the unit. See heat pumps for flats.
• A gas-heated home where tenants would pay more at 26.32p per kWh unless SCOP is high.
• A property you plan to sell soon.

If you want to test your own property, use the landlord heat pump calculator or send an enquiry. Relevant independent firms contact you, with no charge to you and no obligation.