The Short Answer
On our estimates, an air source heat pump for a three-bed house costs about £10,000 to £14,000 installed, or £2,500 to £6,500 after the £7,500 Boiler Upgrade Scheme grant. Bigger radiators, where you need them, add £2,000 to £5,000.
The Energy Saving Trust says heat pumps are more than three times as efficient as a gas or oil boiler, but on a standard tariff they can cost slightly more to run than a new gas boiler; on a heat pump tariff, less. Heat pumps are zero-rated for VAT until 31 March 2027.
Heat pump cost calculator
An air source heat pump installed, then the Boiler Upgrade Scheme grant taken off.
Estimated total
£4,500 to £11,500
| Air source heat pump, 3-bed house, supplied and installed | £10,000 to £14,000 |
| Bigger radiators | £2,000 to £5,000 |
| Boiler Upgrade Scheme grant | minus £7,500 |
Heat pump prices, before and after the grant
| Home | Installed | After the £7,500 grant |
|---|---|---|
| Flat or 2-bed | £9,000 to £12,000 | £1,500 to £4,500 |
| 3-bed house | £10,000 to £14,000 | £2,500 to £6,500 |
| 4-bed or more | £12,000 to £18,000 | £4,500 to £10,500 |
| Bigger radiators, where needed | £2,000 to £5,000 | |
| Air-to-air heat pump (warm air) | £2,000 to £4,000 | Less a £2,500 grant |
The Boiler Upgrade Scheme grant
- How much: £7,500 off an air source or ground source heat pump, £2,500 off an air-to-air heat pump and £5,000 off a biomass boiler. Until March 2027, there's an extra £1,500 on an air or ground source heat pump if the home is heated by oil or LPG and has no mains gas connection.
- Who: owners in England and Wales (including second homes and homes you rent out), replacing fossil fuel heating: oil, gas, electric or LPG. One grant per property, and not for hybrid systems.
- How: choose an MCS-certified installer. They apply to Ofgem for you, and the grant comes straight off the quote and the invoice. The installer must commission the system within 120 days of applying.
Other help in England: the Warm Homes: Local Grant can pay for a heat pump in full for households on a low income (usually £36,000 a year or less), on certain benefits or in certain postcodes, where the home is rated D, E, F or G; the council organises it. ECO, the Energy Company Obligation, can also fund heating upgrades for some households on benefits until 31 December 2026.
What it costs to run
At the 1 October to 31 December 2026 price cap, electricity is 26.32p a kWh and gas 7.97p. A heat pump turns each unit of electricity into more than three units of heat, which is how it competes with gas even though electricity costs about 3 times as much per unit.
The Energy Saving Trust says running costs depend on three things:
- The tariff: on a standard tariff a heat pump can cost slightly more to run than a new gas or oil boiler; on a heat pump time-of-use tariff it can cost less than gas.
- Radiators sized for it, so it can run at a lower water temperature.
- Controls set up properly.
If you disconnect from gas altogether, you also stop paying the gas standing charge.
What a good installation needs
- Radiators that suit it. In England, a new or fully replaced wet heating system should be sized to run at 55°C or lower where feasible. Ask each installer to list which radiators they'd change.
- Space for hot water. The Energy Saving Trust says to think about hot water storage and the space it needs.
- An MCS-certified installer, both for the grant and for the work. Get quotes from at least three.
- Commissioning to the manufacturer's instructions, as Approved Document L asks.
Planning permission
Most installations are permitted development. On a house in England, that means following the MCS Planning Standards; no more than 1 unit (2 on a detached house); an outdoor unit no bigger than 1.5m³; not on a pitched roof, and not within 1m of the edge of a flat roof; not at a listed building; and in a conservation area, not on a wall or roof facing a road. A unit used only for cooling isn't covered: that's air conditioning.
VAT on heat pumps, solar and insulation
HMRC zero-rates the installation of energy-saving materials in homes, including heat pumps, solar panels, batteries and insulation, until 31 March 2027. From 1 April 2027 the rate becomes 5%. A new gas boiler, by contrast, is standard-rated. Check your quote shows no VAT on a heat pump installation.
Get air source heat pump quotes
Heat pumps are priced by the heat the home needs; installers will also check radiators and outside space.
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Frequently asked questions
How much does an air source heat pump cost after the grant?
On our estimates, about £2,500 to £6,500 for a three-bed house after the £7,500 Boiler Upgrade Scheme grant, plus £2,000 to £5,000 if radiators need upsizing.
What are the disadvantages of an air source heat pump?
A higher upfront cost than a boiler even after the grant, possibly bigger radiators, space for hot water storage, and on a standard electricity tariff slightly higher running costs than a new gas boiler, the Energy Saving Trust says.
Is an air source heat pump worth it?
It depends on your tariff, your radiators and what you're replacing. I'd say the case is strongest off the gas grid, with the extra grant for oil and LPG homes. On gas, a heat pump tariff is what makes the running costs work, the Energy Saving Trust's figures suggest.
Do I need planning permission for an air source heat pump?
Usually not on a house in England: it's permitted development if it meets the MCS Planning Standards, the unit is no bigger than 1.5m³, and it isn't at a listed building or facing a road in a conservation area.
Is there VAT on heat pumps?
No, until 31 March 2027: installed heat pumps are zero-rated. From 1 April 2027 it's 5%.
How we priced thisView sources (14, 11 official)
Rules come from the legislation and official guidance, read at source. Prices are our estimates: we check them against trade price data, retailer shelf prices and specialists' price lists, then build them up from their parts so the totals add up. Below are the sources behind the page; the trade price guides we only compare against aren’t listed. Where sources disagreed, we've said so. More on our method.
- IndustryAir source heat pumps (23 September 2026), Energy Saving Trust. Checked 16 Oct 2026.
- OfficialApply for the Boiler Upgrade Scheme: what you can get, GOV.UK. Checked 15 Oct 2026.
- OfficialApply for the Boiler Upgrade Scheme: check if you're eligible, GOV.UK. Checked 15 Oct 2026.
- OfficialApply for the Boiler Upgrade Scheme: how to apply, GOV.UK. Checked 15 Oct 2026.
- OfficialApply for the Boiler Upgrade Scheme: overview (open to people in England and Wales), GOV.UK. Checked 15 Oct 2026.
- OfficialThe Town and Country Planning (General Permitted Development) (England) Order 2015, Schedule 2 Part 14 (renewable energy), legislation.gov.uk. Checked 16 Oct 2026.
- OfficialApproved Document L: Conservation of fuel and power, Volume 1 Dwellings (2021 edition incorporating 2023 amendments), GOV.UK. Checked 16 Oct 2026.
- OfficialEnergy-saving materials and heating equipment (VAT Notice 708/6), HM Revenue & Customs. Checked 16 Oct 2026.
- OfficialApply for the Warm Homes: Local Grant to improve a home (England), GOV.UK. Checked 15 Oct 2026.
- OfficialHelp from your energy supplier: the Energy Company Obligation, GOV.UK. Checked 16 Oct 2026.
- OfficialExtending the ECO4 end date (consultation outcome, updated 23 January 2026), GOV.UK. Checked 16 Oct 2026.
- OfficialEnergy price cap unit rates and standing charges, 1 October to 31 December 2026, Ofgem. Checked 15 Oct 2026.
- IndustryHeat pump cost explained, Octopus Energy. Checked 15 Oct 2026.
- IndustryAir source heat pump cost, British Gas. Checked 15 Oct 2026.
