Last updated: 11 September 2026
A heat pump costs most UK homeowners between £8,000 and £15,000 installed, with a typical three-bedroom semi landing around £9,000 to £12,000 before any grant. The Boiler Upgrade Scheme takes £7,500 off that for most people, and £9,000 if you’re off the gas grid replacing oil or LPG, which brings the real figure most households pay to somewhere between £2,000 and £6,000.
That’s the short answer. The longer answer is that the spread is enormous, the quote you get depends far more on your house than on the heat pump itself, and there are properties where the honest recommendation is not to bother. This page covers all three.
What the installation actually costs
Installed prices before grant, by property type:
| Property | System size | Installed cost | After £7,500 grant |
|---|---|---|---|
| Flat or small terrace, well insulated | 4-6 kW | £7,000-£9,500 | From around £500 |
| Three-bed semi | 6-10 kW | £9,000-£13,500 | £2,000-£6,000 |
| Four-bed detached or older stock | 8-14 kW | £11,000-£16,500 | £3,500-£9,000 |
If you’re off the mains gas grid and currently heated by oil or LPG, the grant rises to £9,000 until 31 March 2027. Take another £1,500 off the after-grant figures above.
Ground source is a different proposition entirely, at £20,000 to £30,000 installed, driven almost entirely by the cost of trenching or drilling boreholes. The same £7,500 grant applies, so the net cost is far higher. It only makes sense where you have the land and a long time horizon.
Air-to-air heat pumps, which heat through wall units rather than radiators, run £4,000 to £9,500. These became grant-eligible for the first time in April 2026, at £2,500.
Where the money goes
Roughly £3,500 to £6,000 of a typical quote is labour. The rest is hardware, and the hardware is not just the heat pump.
- The heat pump unit itself: £3,000 to £8,000 depending on output and brand
- Hot water cylinder: most homes need a new one, 200-300 litres, £800 to £1,800
- Radiator upgrades: the single most variable item. Heat pumps run at lower flow temperatures, so radiators sized for a boiler are often undersized. Budget £150 to £400 per radiator changed, and expect four to six in a typical retrofit
- Pipework: older microbore pipework often needs replacing, which can add £1,000 to £3,000
- Electrical work: a dedicated circuit, sometimes a consumer unit upgrade
- Survey and system design: should be included, and if it isn’t, that’s a warning sign
The radiator and pipework items are why two identical houses on the same street can get quotes £4,000 apart. It’s not the installer being greedy, it’s the house.
What you’ll pay after the grant
The Boiler Upgrade Scheme covers England and Wales. You don’t apply yourself. Your MCS-certified installer applies to Ofgem on your behalf and deducts the grant from the invoice, so you only ever see the reduced price.
Current grant values:
| System | Grant |
|---|---|
| Air source heat pump (air-to-water) | £7,500 |
| Ground source heat pump | £7,500 |
| Air source or ground source, off gas grid replacing oil or LPG | £9,000 (until 31 March 2027) |
| Air-to-air heat pump | £2,500 |
| Heat battery | £2,500 |
| Biomass boiler (rural, off gas grid only) | £5,000 |
Two things changed in April 2026 that matter. The requirement to have a valid EPC with no outstanding insulation recommendations was removed, which opened the scheme to a much wider group of homeowners and cut several weeks off the application. And air-to-air systems became eligible for the first time, which helps flats and homes with no wet central heating.
There’s no means test. Any homeowner in England or Wales can apply regardless of income.
The £9,000 rate is time-limited. It runs from 21 July 2026 to 31 March 2027 and applies only to homes off the mains gas grid currently heated by oil or LPG. Grant pots can also close early if the budget runs out, so if that’s your situation, this is not a decision to sit on.
Outside England and Wales: Home Energy Scotland offers up to £7,500, rising to £9,000 in rural and island areas, plus an interest-free loan. Wales has Nest, Northern Ireland has NISEP.
Running costs, honestly
This is where most guides get vague, so here are the actual numbers.
A typical three-bedroom house runs a heat pump for somewhere around £1,000 a year, with the realistic range from £855 to £1,700 depending on the property and the tariff.
But the comparison that matters is cost per unit of heat. At the current price cap, electricity is around 26p per kWh and gas around 7.3p. A heat pump with a coefficient of performance of 3.0 delivers heat at roughly 8.7p per kWh.
Read that again, because it’s the bit the industry glosses over. At a COP of 3.0, a heat pump costs slightly more to run than a gas boiler. Not less.
You get ahead in three situations:
- Better efficiency. A well-designed system in a reasonably insulated home achieves a seasonal COP of 3.5 to 4.5, which does beat gas
- A heat pump tariff. Several suppliers offer dedicated tariffs with much lower rates for heat pump use, and these change the maths substantially
- You’re replacing oil, LPG or electric heating. Against these, a heat pump wins comfortably on running cost, which is why off-gas-grid homes are the strongest case
If you’re on mains gas with a functioning boiler and a poorly insulated house, the running cost saving may be zero or negative. Anyone telling you otherwise is selling something.
Payback
On a straight cost comparison against a new gas boiler, average payback is around 14 years. That’s the headline figure and it’s not flattering.
It looks very different if:
- You’re off the gas grid, where payback typically falls to 5 to 8 years
- Your boiler needs replacing anyway, so you compare against £3,000 for a new boiler rather than against zero
- You’re on a heat pump tariff
- You factor in the property value and EPC rating, which matters for landlords facing the EPC C deadline in the private rental sector
It looks worse if you’re on mains gas, have a boiler with years left in it, and live in a solid-wall property with no insulation.
When a heat pump isn’t the answer
We’d rather say this than have you find out after spending £11,000.
Poor insulation with no plan to fix it. A heat pump in an uninsulated solid-wall house will struggle and cost a fortune to run. Insulate first, heat pump second. The Warm Homes Local Grant may fund the insulation.
No space for the outdoor unit. It needs a sensible external location with airflow and a run to the plant room. Flats and mid-terraces with no rear access are genuinely difficult.
A boiler with life left and mains gas. If your boiler is five years old and working, the financial case for replacing it now is weak. Nothing is forcing your hand. The proposed 2035 phase-out of gas boilers in existing homes was dropped from the Warm Homes Plan published in January 2026. It remains entirely legal to fit a replacement gas boiler in an existing home.
You’re moving within a few years. You won’t see the payback and the value uplift is uncertain.
What to check in a quote
- Is the installer MCS certified? Without this there is no grant, full stop
- Are they a member of RECC or HIES? These are the consumer codes, and they’re your recourse if it goes wrong
- Has a room-by-room heat loss calculation been done? Not an estimate from floor area. If they haven’t been in every room with a tape measure, the system will be wrong
- Is the radiator schedule itemised? Vague “radiator upgrades as required” lines are where quotes balloon
- What flow temperature is the system designed around? Lower is more efficient. Anything designed at 55°C or above suggests the radiators are undersized
- Is the hot water cylinder included and sized correctly?
- What’s the predicted seasonal COP, and what’s it based on?
A good installer will spend two hours in your house before quoting. One who quotes off a phone call is guessing.
Written by Ben Jardine. Ben is the editor of The Energy Upgrade and has been publishing online since 2014. He is not a heating engineer: this page sets out what the research and the official scheme rules actually say, and you should take advice from an MCS-certified installer before committing to an installation.