Heat pumps for landlords in Liverpool

Liverpool is a city of terraces

Liverpool’s defining number is its terraced share. The 2021 Census records 37.9% of households in terraced homes, about 78,600, higher than Manchester (28.0%), Sheffield (26.0%) or Leeds (25.0%). Semi-detached homes are 30.7%, purpose-built flats 17.2% (about 35,700), converted or shared houses 3.9% (about 8,100) and detached only 8.2%.

Private renting is 26.1%: 54,067 households out of 207,491. Owner-occupiers are 46.8% and social tenants 26.4%. These are all-household shares, so they describe the city rather than your rental.

For heat pumps, a terrace is a mixed candidate. There is usually a rear yard for an outdoor unit, but the space is tight, a neighbour is close and many older terraces have solid walls that lose more heat. Under the England permitted development rules, a house that is not detached may have one unit, and the 37.0 dB(A) noise limit under the MCS sound calculation applies. Measure the spot before you ask for prices, and read solid wall rentals: heat pump or insulation first.

Heating: gas first, electric second

Mains gas heats 77.8% of Liverpool homes, about 161,400 households. Electric-only heating is 9.8%, about 20,300. District heating is 0.5%, oil 0.1%, and 2.3% have no central heating.

So most Liverpool landlords face the gas to heat pump question, where the margin is thin. The 9.8% on electric heating is the better case: a heat pump at a seasonal efficiency of 3.0 uses about a third of the electricity of direct heating. Oil is so rare that the £9,000 off-gas Boiler Upgrade Scheme rate will almost never apply; plan on £7,500.

Worked example (modelled, not a real project)

Inputs: a two-bedroom terrace using 9,000kWh of heat a year (an assumption; the site’s 12,000kWh fact sheet figure is for a three-bedroom semi), a gas boiler at 90% efficiency, a heat pump at a seasonal efficiency of 3.0 or 3.5, and Ofgem cap unit rates for 1 October to 31 December 2026 (gas 7.97p, electricity 26.32p per kWh). Standing charges are excluded.

Heating	Fuel needed	Fuel cost a year
Gas boiler, 90%	10,000kWh gas	about £797
Heat pump, 3.0	3,000kWh electricity	about £790
Heat pump, 3.5	2,571kWh electricity	about £677

At 3.0 the tenant’s bill is level with gas. At 3.5 it falls by about £120 a year. The Energy Saving Trust gives around £12,000 for a typical air source heat pump before grant, so about £4,500 after £7,500, before radiators, a cylinder or insulation. Your quotes will differ.

Landlord licensing: now and after March 2027

Liverpool City Council’s selective licensing scheme, which the council calls Landlord Licensing, started on 1 April 2022 and covers designated wards. Privately rented homes in those wards need a licence, and the licence holder must meet the licence conditions.

The current fees reward efficiency directly:

Licence type (current scheme)	Fee
Full property licence	£704
New rental property	£486
Discount where the home is EPC C or above	£64 off
Discount for all flats in one block under one holder	£64 off
Discount for members of named landlord bodies	£37 off

The council says that since April 2022 it has received more than 56,000 applications, granted over 48,000 licences, carried out more than 19,000 inspections and found over 3,500 hazards. The scheme ends in March 2027. The council’s consultation on what follows closed on 5 October 2026, with three options: a citywide scheme across all 64 wards, a deprivation-based scheme of 29 wards, or a poor property conditions scheme of 26 wards. Until a decision is published, do not assume your address will be outside the next scheme.

HMOs and conservation areas

Liverpool has two HMO Article 4 directions, one covering 11 wards and one covering the Dales area. Inside them, converting a home to an HMO for three or more people needs planning permission; HMOs already in use for three or more before 17 June 2021 are not affected. An HMO for seven or more needs permission anywhere in the city. See the HMO landlord guide.

Separately, the council’s other Article 4 directions cover most of Liverpool’s conservation areas and control works that change a building’s external appearance. In Kensington Fields, Knotty Ash, Toxteth Park and the Avenues these apply only to elevations facing a highway. An outdoor unit on a rear yard wall is a different question from one on a street frontage, so ask planning which applies.

EPC C, grants and the 2030 plan

Today the legal minimum is EPC E with a £3,500 cost cap including VAT. The government plans EPC C by 1 October 2030 with a £10,000 cap, not yet in regulations. In Liverpool an EPC C already earns a licence fee discount under the current scheme, which is a small but real local reason to aim for C. Read does a heat pump improve an EPC rating before assuming the heating is the cheapest route.

• Boiler Upgrade Scheme: £7,500 for air-to-water or ground source. See the BUS page for landlords.
• Warm Homes: Local Grant: through the Liverpool City Region Combined Authority consortium, £31,805,813 across six councils. See the Warm Homes Local Grant page.
• Warm Homes Loan Scheme: a lender loan, not a grant.

Liverpool City Council declared a climate emergency in 2019, and its 2030 Net Zero Liverpool Action Plan sets the city’s net zero goal. Liverpool also took part in the government’s heat network zoning pilot. Both are council and government plans, not landlord duties.

When a heat pump is the wrong answer

• A solid-wall terrace with little insulation: fabric first.
• A street-facing unit position in a conservation area without planning advice.
• A gas-heated home where tenants would pay more unless the system reaches a high seasonal efficiency.
• A sale planned before the next licence is due.

Run your own numbers in the landlord heat pump calculator or send an enquiry. Relevant independent firms contact you, with no charge to you and no obligation.