The UK government has broadened the Boiler Upgrade Scheme (BUS) to cover air-to-air heat pumps and heat batteries, offering landlords and homeowners additional financial support to replace traditional gas boilers with low-carbon heating alternatives. This development follows the Autumn Budget announcement by Chancellor Rachel Reeves, which introduced the Warm Homes Plan as a replacement for the previous ECO scheme.

Overview of the Expanded Boiler Upgrade Scheme

The Boiler Upgrade Scheme provides grants to encourage the installation of low-carbon heating systems, such as heat pumps and biomass boilers, in residential properties. The recent expansion means landlords can now access a £2,500 grant specifically for air-to-air heat pump installations. This is significant as air-to-air heat pumps represent a versatile heating solution, capable of both warming homes in winter and cooling them during summer months.

According to the National Residential Landlords Association (NRLA), the average cost of installing an air-to-air heat pump is around £3,000, so the grant covers a substantial portion of the expense. The scheme continues to offer £7,500 grants for traditional air and ground-source heat pumps. Additionally, the government plans to support heat batteries at the same £2,500 grant level once installation and product standards are finalised. Efforts are also underway to simplify the certification process for these installations.

Benefits of Air-to-Air Heat Pumps for Landlords

Minister for Energy Consumers Martin McCluskey highlighted the advantages of air-to-air heat pumps, noting their dual functionality for heating and cooling. This makes them particularly suitable for flats or smaller homes that may lack central heating systems. For landlords, this means greater flexibility when upgrading properties to meet evolving energy efficiency standards.

Furthermore, the government is offering discounts for heat batteries and is consulting on the potential role of other innovative, clean heating technologies, including thermal storage, infrared panels, and renewable fuels. These developments could provide landlords with a broader range of options to improve property energy performance in the coming years.

Challenges in Installing Heat Pumps

Despite the financial incentives, installing heat pumps can be complex, especially in the private rented sector. Planning restrictions and leasehold arrangements often pose significant barriers, particularly for Houses in Multiple Occupation (HMOs) and leasehold flats. Rodney Townson from landlord organisation iHowz has pointed out that these factors can add administrative burdens and costs, making heat pump installations unaffordable or impractical for some landlords. Older properties in the private rented sector may also face additional difficulties in accommodating such systems.

Landlords remain concerned about the overall costs associated with meeting the government’s proposed energy performance certificate (EPC) targets. The government has suggested, though not yet legislated, that all private rented properties must achieve an EPC rating of C by 2030, with new tenancies required to meet this standard by 2028. The NRLA has previously estimated that landlords may need to invest between £6,100 and £6,800 per property to comply with these requirements.

It is important to note that many of these costs are likely to be passed on to tenants. A government minister acknowledged last year that landlords can increase rents to cover the expenses of EPC upgrades, which could have implications for rental affordability.

Implications for UK Landlords and Agents

For landlords and letting agents, the expanded Boiler Upgrade Scheme presents an opportunity to improve property energy efficiency while benefiting from government grants. Air-to-air heat pumps, in particular, offer a practical solution for properties where traditional central heating systems are not feasible. However, landlords should carefully consider planning and leasehold constraints before proceeding with installations.

Understanding the financial implications of EPC compliance remains crucial. While grants help reduce upfront costs, the broader investment required to meet EPC C standards may be substantial. Landlords should factor these considerations into their long-term property management and refurbishment plans.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is set to launch a new Trusted Partners Hub in the first quarter of 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Service providers in legal, trades, insurance, financial, mortgage, tenant screening, and related sectors are invited to register their interest to become TLA service partners.

Landlords and agents may find the Trusted Partners Hub a valuable resource for accessing reliable services to assist with property upgrades and compliance in the evolving regulatory landscape.