How Much Does an Air Source Heat Pump Cost?
An air source heat pump costs more to install than a gas boiler, and whether it costs less to run depends almost entirely on how well it is designed. This guide covers the installed price, what the £7,500 Boiler Upgrade Scheme grant takes off it, and the running-cost arithmetic against a gas boiler at the current Ofgem price cap, so you can see where the break-even sits.
Installed price
For a typical three-bedroom UK home, a full air source heat pump installation is around £14,000 to £16,500, and the wider market spans roughly £12,400 to £25,000. The spread comes from the size of the unit the heat loss calculation calls for, the hot water cylinder, how many radiators need upsizing, any pipework changes and the electrical work. The £7,500 Boiler Upgrade Scheme grant comes off that price, and installation is zero-rated for VAT until 31 March 2027.
The Boiler Upgrade Scheme
The Boiler Upgrade Scheme is a government grant in England and Wales, currently £7,500 towards an air source heat pump. It is claimed by an MCS-certified installer, so the money comes off your quote rather than reaching your bank. Since 28 April 2026 you no longer need a valid EPC to apply, and the old requirement to clear loft and cavity insulation recommendations has gone. New builds and social housing are excluded, it is one grant per property, and hybrid systems do not qualify. If you are replacing oil or LPG, our oil and LPG heat pump guide covers the off-grid detail.
Running costs against a gas boiler
The worked example below uses a home needing 11,500 kWh of heat a year and the Ofgem price cap for 1 October to 31 December 2026: electricity 26.32p per kWh, gas 7.97p. Standing charges are left out.
| System | Efficiency | Fuel bought | Annual cost |
|---|---|---|---|
| Gas boiler (real-world) | 85% | 13,529 kWh gas | £1,078 |
| Heat pump, poor design | SCOP 2.8 | 4,107 kWh electricity | £1,081 |
| Heat pump, typical good design | SCOP 3.3 | 3,485 kWh electricity | £917 |
| Heat pump, well designed and tuned | SCOP 3.8 | 3,026 kWh electricity | £797 |
Break-even sits at a seasonal efficiency of about 2.8. A heat pump designed for a low flow temperature clears it comfortably; one fitted to undersized radiators running hot may not. The cap changes every quarter, and VAT on domestic electricity is suspended until 31 March 2027, so recheck the rates when you decide. The calculator on our air source heat pump page runs the same sums on your own figures.
What drives the price up or down
The heat loss calculation sets the size of the unit, and a leaky house needs a bigger one. Radiators are the next biggest variable: each one is checked against its room at the design flow temperature, and a few typically need upsizing while most stay. A heat pump needs a hot water cylinder with a large coil, so a combi home needs space for one. Electrical work, the outdoor unit's position and the noise assessment for permitted development add their share. Insulation done first lowers both the unit size and the running cost.
Cylinder, noise and planning
A heat pump stores hot water rather than heating it on demand, so it needs a cylinder, typically 180 to 250 litres for a family home, with a larger coil than a boiler cylinder. In a combi home that space is often the deciding factor. The outdoor unit runs at roughly 40 to 50 dB(A) at a metre. In England most installations are permitted development; the rules were rewritten on 29 May 2025, removing the old one-metre boundary rule, and the MCS 020 a) calculation must show 37.0 dB or less one metre from every habitable-room window and door of neighbouring properties. Conservation areas and listed buildings carry extra restrictions, so siting is checked at survey.
Where heat pumps make most sense
The strongest cases are homes off the gas grid on oil, LPG or electric heating, well-insulated homes that can run at a low flow temperature, and households adding solar panels, since the heat pump turns each unit of generated electricity into about three units of heat. For a gas-heated Victorian terrace with small radiators, a modern condensing boiler may still be the better value for now; we will say so honestly. We install both, which means we have no reason to push one.
Is it worth it?
On today's prices, a well-designed heat pump runs a little cheaper than a gas boiler and much cheaper than oil, LPG or direct electric heating, with far lower carbon emissions. The grant narrows the installation gap but rarely closes it against a like-for-like boiler swap. The deciding factors are your house's heat loss, the flow temperature the radiators allow, and what you heat with now.
Common questions
How much does an air source heat pump cost to install?
For a typical three-bedroom UK home, around £14,000 to £16,500, with the wider market spanning roughly £12,400 to £25,000. The £7,500 Boiler Upgrade Scheme grant comes off that, and installation is zero-rated for VAT until 31 March 2027.
Is a heat pump cheaper to run than a gas boiler?
At the October to December 2026 Ofgem cap, a heat pump needs a seasonal efficiency above about 2.8 to beat an 85% efficient gas boiler. A typical well-designed system at 3.3 runs about 15% cheaper; one designed badly can cost the same or more.
Do I need an EPC to get the Boiler Upgrade Scheme grant?
Not any more. Since 28 April 2026 a valid EPC is no longer required to apply; where the property has one it goes in with the application, and where it does not, the installer supplies the alternative evidence the scheme accepts.
Will I need new radiators for a heat pump?
Usually a few, not all. Each radiator is checked against its room at the design flow temperature; north-facing living rooms and extensions often need a larger panel, while bedrooms and hallways often pass as they are.
Updated 15 October 2026
