Last updated: October 2026 | Reading time: 8 minutes
Short answer: most UK homeowners pay between £10,000 and £16,000 to install an air source heat pump before grants. With the £7,500 Boiler Upgrade Scheme (BUS) grant, the typical out-of-pocket cost falls to roughly £2,500 to £8,500. Your exact price depends on your home size, heat loss, the unit you choose and how much extra work is needed (radiators, a hot water cylinder, pipework).
Below we break down where the money goes, what changes the price, how much you can save and how to compare quotes without overpaying.
Prices are typical ranges based on market data and installer quotes. They vary by region and installer, and grant rules can change, so always confirm current figures with at least three MCS-certified installers and on the official GOV.UK page.
How much does an air source heat pump cost? (quick table)
| Home type | Typical system size | Cost before grant | Cost after £7,500 BUS grant |
|---|---|---|---|
| Flat or small terrace (1-2 bed) | 4-6 kW | £9,000 – £12,000 | £1,500 – £4,500 |
| Semi-detached (3 bed) | 6-8 kW | £10,000 – £14,000 | £2,500 – £6,500 |
| Detached (4 bed) | 8-12 kW | £12,000 – £16,000 | £4,500 – £8,500 |
| Large or older detached home | 12-16 kW | £14,000 – £20,000+ | £6,500 – £12,500+ |
These figures usually include the heat pump, installation, a hot water cylinder where needed and commissioning. They may not include major upgrades such as new radiators throughout, insulation work or electrical upgrades.
What is included in the price?
A full quote should itemise each of these. If one is missing, ask why.
- The heat pump unit (outdoor unit): £3,000 – £8,000 depending on brand and output.
- Hot water cylinder: £800 – £2,000. Most heat pumps need a cylinder, and many homes with combi boilers do not have space or a tank today.
- Radiators or underfloor heating changes: £300 – £1,000 per radiator if replacement is required. Many homes only need a few swapped.
- Pipework and controls: £500 – £1,500, including a smart thermostat or weather compensation.
- Labour and installation: £2,000 – £4,000 for the install team, usually over 2-4 days.
- Electrical work: £200 – £1,500 if your consumer unit or supply needs upgrading.
- Commissioning, certification and warranty registration.
- Heat loss survey and design: sometimes bundled into the price, sometimes charged separately (typically £100 – £500).
VAT is currently 0% on installation of energy-saving materials, including heat pumps, in Great Britain. That relief is scheduled to run until March 2027, so check whether it still applies when you plan your install.
The Boiler Upgrade Scheme: how the £7,500 grant works
The Boiler Upgrade Scheme gives eligible homeowners in England and Wales an upfront discount of up to £7,500 towards an air source heat pump. The key points:
- Your installer applies for it, not you. The amount is deducted from your invoice, so you do not pay it upfront and wait for a refund.
- You must use an MCS-certified installer.
- The new heat pump must replace a fossil fuel heating system (for example gas, oil or LPG). It is generally not available for new-build homes.
- The scheme is funded for several years, but funding and conditions can change, so check GOV.UK before you commit.
- Scottish households have a separate route through Home Energy Scotland, which offers grants and interest-free loans. Rules differ, so check the current offer.
Practical tip: ask each installer to show the grant as a separate line on the quote, so you can compare real prices like for like.
What affects the cost of your heat pump?
Two homes that look similar can have very different quotes. These are the main reasons.
1. Heat loss and home size
The unit has to match your home’s heat demand. A well-insulated three-bed semi might need a 6-8 kW unit. A draughty older detached house might need 12 kW or more. A proper heat loss calculation, not a rule of thumb, is the most important step. Be wary of installers who quote without visiting.
2. Radiators and emitters
Heat pumps run at lower flow temperatures than gas boilers, so some radiators may be too small. Many homes need only a few upgrades; some need none. Ask for the radiator-by-radiator assessment in writing.
3. Hot water cylinder
If you have a combi boiler, you will probably need space for a cylinder (often 150-250 litres). That is a significant part of the cost and sometimes the biggest practical challenge in small homes.
4. Brand and model
Premium brands such as Mitsubishi Electric, Daikin and Vaillant tend to cost more but have strong track records and good warranties. Mid-range models can be much cheaper with good performance. The cheapest unit is not always the best value over 15 years.
5. Property type and location
London and the South East are generally more expensive than other regions. Listed buildings, tight access or limited outdoor space for the unit can add cost.
6. Insulation
You do not have to insulate before getting the BUS grant, but better insulation means a smaller (cheaper) unit and lower running bills. Loft insulation and draught-proofing are low-cost upgrades that often pay back quickly.
How much does it cost to run an air source heat pump?
A heat pump uses electricity to move heat, delivering roughly 2.5 to 4 units of heat for every 1 unit of electricity (this is called the seasonal coefficient of performance, or SCOP).
As a simple example for an average UK home using about 12,000 kWh of heat a year:
| System | Efficiency | Approx. annual running cost |
|---|---|---|
| Gas boiler | 85-90% | £700 – £900 |
| Heat pump on standard tariff | SCOP 3.0 | £950 – £1,200 |
| Heat pump on a heat pump tariff | SCOP 3.0 | £700 – £950 |
These figures depend on energy prices, which change. The key point is that a heat pump on a standard tariff can cost about the same as, or slightly more than, a gas boiler, but on a time-of-use or heat-pump-specific tariff it can be cheaper. Electricity is more expensive per kWh than gas, so efficiency matters.
Is a heat pump worth the money?
Pros
- Large upfront discount with the BUS grant.
- Lower carbon emissions compared with gas, and getting cleaner as the grid decarbonises.
- Potentially lower bills on the right tariff, especially with solar panels.
- Fewer maintenance issues than a boiler, with an annual check usually enough.
- Future-proofing as gas boiler phase-outs and carbon costs develop.
Cons
- Higher upfront cost than a like-for-like gas boiler (typically £2,000 – £5,000 for a boiler replacement).
- Needs space for the outdoor unit and usually a cylinder.
- Poorly designed systems can be inefficient and noisy.
- Savings depend on your tariff, home insulation and how you use the system.
Payback: in a typical three-bed home, with the BUS grant and a good tariff, many households see a payback of 8 to 15 years against a gas boiler. Without the grant, it is longer. If you are replacing oil or LPG, payback is often much faster.
How to lower the cost of your heat pump installation
- Always claim the BUS grant and make sure it appears on your quote.
- Get at least three quotes from MCS-certified installers and compare the same scope of work.
- Improve insulation first where it is cheap: loft, draught-proofing, hot water tank jackets.
- Choose a heat pump tariff or time-of-use tariff to reduce running costs.
- Ask about financing: some lenders offer green home loans and 0% deals for part of the cost.
- Check for local council or housing association schemes, which sometimes add support on top of national grants.
- Do not oversize the unit. A bigger heat pump costs more and can cycle on and off, reducing efficiency.
Questions to ask before accepting a quote
- Is the installer MCS-certified, and can I see the certificate?
- Have you done a room-by-room heat loss calculation?
- Which radiators need replacing, and why?
- What is the SCOP of the proposed unit, and what flow temperature will you design for?
- Is the hot water cylinder included, and what size?
- Is the BUS grant shown as a separate deduction on the quote?
- What warranty do I get on the unit and the installation?
- Who handles commissioning and registration?
- What is not included in this price?
A good installer will answer these clearly and in writing.
Frequently asked questions
How much does an air source heat pump cost for a 3-bedroom house in the UK?
Most three-bedroom homes pay between £10,000 and £14,000 before the grant. After the £7,500 Boiler Upgrade Scheme discount, many households pay around £2,500 to £6,500, depending on radiator and cylinder needs.
Is the Boiler Upgrade Scheme still available in 2026?
Yes, the scheme has been running with funding for several years, but conditions and funding levels can change. Check the official GOV.UK page and ask your installer to confirm eligibility before you sign.
Do I need to replace all my radiators?
Not usually. Many homes only need a few radiators upgraded or none at all. Ask your installer for a room-by-room assessment so you know exactly what is required.
Are heat pumps cheaper to run than gas boilers?
It depends on your tariff. On a standard tariff, running costs are often similar. On a heat pump or time-of-use tariff, and with good insulation, they can be cheaper.
How long does installation take?
Typically 2 to 4 days for the work itself, plus a few weeks for survey, design and booking. Complex jobs, such as adding a cylinder or upgrading electrics, can take longer.
How long does an air source heat pump last?
With regular servicing, 15 to 20 years is a common lifespan, and many manufacturers offer warranties of 5 to 7 years.
Can I install a heat pump myself?
No, not if you want the grant or a valid warranty. Installation must be done by a qualified, MCS-certified installer.
Final verdict
An air source heat pump costs £10,000 to £16,000 to install in most UK homes, and the £7,500 BUS grant can bring the final price down dramatically. Whether it is worth it depends on your home’s insulation, your tariff and what you are replacing. For many households, especially those replacing oil or LPG, or those with solar panels, it is a strong long-term investment.
The most important step is to compare detailed quotes from several certified installers and make sure the system is designed around your home’s actual heat loss.