Heat pumps for landlords in London

What the census says about London’s rented homes

Greater London had 3,423,889 households at the 2021 Census, and 1,025,533 of them (30.0%) rented privately. Another 23.1% rented socially and 45.2% owned. The census block for this page covers the whole of Greater London, not just the City.

The type of home matters more here than anywhere else in England. Flats make up 40.3% of London homes, about 1,379,800 households. Converted or shared houses add 11.1%. Terraced houses are 21.3%, semi-detached 18.6% and detached only 6.1%.

Measure (Census 2021)	Greater London
Households	3,423,889
Renting privately	30.0% (1,025,533)
Flats	40.3%
Converted or shared house	11.1%
Terraced	21.3%
Semi-detached	18.6%
Detached	6.1%
Mains gas central heating	70.5%
Electric-only central heating	12.6%
District or communal heat	3.4%
Oil	0.1%
Two or more heating types	8.5%

A landlord with a London portfolio is therefore most likely to own flats, often in a building someone else controls. The heating question is less “which heat pump?” and more “who has to agree, and where does the unit go?”

The decision that matters most: electric-only flats

Mains gas serves 70.5% of London homes, but 12.6% rely on electric-only heating. Applied to all 3,423,889 households that is about 431,400 households. If private rented homes were split the same way, which is an assumption and not a census figure, roughly 129,000 rented homes would be electric-only.

That group has the clearest case. Direct electric heating turns each unit of electricity into one unit of heat. A heat pump turns it into around three, depending on the system and how it is run.

Worked example (modelled, not a real project). Take a one-bedroom flat using 5,000kWh of heat a year (an assumption). At the Ofgem cap from 1 October to 31 December 2026, electricity is 26.32p per kWh and gas is 7.97p.

• Direct electric heating: 5,000kWh x 26.32p = £1,316 a year.
• Heat pump at a seasonal efficiency (SCOP) of 3.0: 5,000 / 3.0 = 1,667kWh x 26.32p = £439 a year.
• Gas boiler at 90% efficiency: 5,000 / 0.9 = 5,556kWh x 7.97p = £443 a year.

The heat pump saves about £877 a year against direct electric, and costs about the same as gas. The bill saving goes to whoever pays the energy bill, often the tenant. For the landlord the likely gain is a better EPC and a more lettable home. Standing charges are left out of the sums. The running costs for tenants page covers who benefits.

Where a London flat heat pump gets stuck

Many London flats are leasehold, in a block run by a freeholder or managing agent. Before any quote, read the lease for rules on external alterations, roof access and shared walls. Then ask where the outdoor unit goes.

Under permitted development in England (Class G), a block of flats is allowed one air source heat pump in total, with a compressor of no more than 0.6 cubic metres, against 1.5 cubic metres on a house. The unit must also meet MCS 020 a), which sets a noise limit of 37.0 dB(A) at a neighbour’s window, and on a block that includes the other flats. Tight London courtyards and balconies make that hard. An air-to-air system, which needs no wet radiator system and is covered by a £2,500 Boiler Upgrade Scheme grant where it replaces existing heating, can suit a flat without one. See air-to-air heat pumps for rental properties and heat pumps for flats.

Conservation areas and Article 4 directions are set by the local planning authority, usually the borough. Check your borough before you assume permitted development.

Verified London facts for a landlord

Warm Homes: Local Grant. On the GOV.UK list of successful authorities (updated 2 July 2026) the Greater London Authority leads a £53,470,024 project with 31 members: 30 boroughs and the City of London. Barking and Dagenham has its own allocation and Croydon sits in a separate consortium. The GLA’s decision MD3366 (approved 2 April 2025) says the money will improve around 3,665 low-income homes rated EPC D to G, owned or privately rented, under the Warm Homes London banner. MD3366 gave landlord funding of up to £30,000 for a first property and 50% of the cost, up to £15,000 a home, for later ones. Those amounts predate the national guidance updated in June 2026, which raised the caps to £16,600 for energy performance and £16,600 for low carbon heating as project averages. The rule itself is unchanged: one property per landlord fully funded, then a 50% landlord contribution. Landlords also declare no rent rise because of the work, and EPC F and G rentals need a registered exemption first. See the Warm Homes: Local Grant guide.

Licensing. There is no single London scheme. Newham’s selective licensing runs from 1 June 2023 to 31 May 2028 across 22 of 24 wards, for example. Other boroughs run different schemes with different dates. A licence is a separate duty from the energy rules.

Heat networks. District or communal heating serves 3.4% of London households, about 116,400. Two London partners, Barking and Dagenham and Southwark, took part in the government’s heat network zoning pilot (list updated 25 November 2025). If your building is on a network, speak to the operator before you price a heat pump. For new development, the Mayor has said London Plan policy SI 3 prioritises connection to district heat networks in heat network priority areas, so a new build-to-rent block there may be steered towards a network rather than separate heat pumps. See heat networks and ambient loops for build to rent.

Which EPC rules apply to a London let today

Today the minimum is EPC E, with a £3,500 cost cap and a maximum fine of £5,000 per property in total. The government has said it will raise the standard to EPC C by 1 October 2030, with a £10,000 cap, but the regulations have not yet been laid. Read EPC C by 2030 and your heating choice for the dates and treat the 2030 rule as planned.

When a heat pump is the wrong answer in London

• The lease or freeholder forbids an outdoor unit, and there is no sensible place to site one.
• The flat is on a district heat network and has no boiler to replace.
• The home is a small, well insulated flat on mains gas. At 26.32p against 7.97p, a heat pump at SCOP 3.0 only matches gas on running costs, so the spend buys little.
• Fabric is poor. Draught proofing, loft insulation or glazing may lift the EPC for less money.

Break-even is simple. Gas heat costs 7.97 / 0.9 = 8.86p per kWh, so a heat pump needs a SCOP of 26.32 / 8.86 = 2.97 just to match it.

Next step

Work out your own numbers with the heat pump landlord calculator, or send an enquiry through the quote form and relevant independent firms will contact you. There is no charge and no obligation.