The UK government has broadened the Boiler Upgrade Scheme (BUS) to incorporate air-to-air heat pumps and heat batteries, offering landlords and homeowners additional financial support to replace 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 ECO scheme, aiming to reduce energy bills.

Overview of the Boiler Upgrade Scheme Expansion

The Boiler Upgrade Scheme provides grants to encourage the installation of environmentally friendly heating systems, such as heat pumps and biomass boilers, in place of traditional gas boilers. The recent expansion now includes air-to-air heat pumps, which are particularly suitable for properties without central heating, and heat batteries, pending finalisation of installation and product standards.

According to the National Residential Landlords Association (NRLA), landlords can access a £2,500 grant towards the installation of an air-to-air heat pump. This grant covers a significant portion of the average installation cost, which is around £3,000. The scheme continues to offer £7,500 for traditional air and ground-source heat pump 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 ability to provide heating in winter and cooling during summer months. This dual functionality makes them an attractive option for landlords managing flats or smaller homes that lack central heating systems.

In addition to heat pumps, the government is offering discounts on heat batteries and is consulting on other innovative clean heating technologies, including thermal storage, infrared panels, and renewable fuels. These measures aim to broaden the range of low-carbon heating solutions available to landlords and tenants.

Challenges in Installing Heat Pumps

Despite the financial incentives, installing heat pumps can be challenging, particularly in the private rented sector. Planning restrictions and leasehold agreements often complicate installations, especially in Houses in Multiple Occupation (HMOs) and leasehold flats. Rodney Townson from landlord organisation iHowz has pointed out that these administrative and regulatory hurdles can increase costs or render installations unaffordable for some landlords.

Furthermore, much of the private rented sector consists of older properties, which can be more difficult to retrofit with heat pump technology. These challenges are compounded by the government’s proposed, though not yet legislated, requirement for all private rented properties to meet Energy Performance Certificate (EPC) C standards by 2030, with a 2028 deadline for new tenancies.

Financial Implications for Landlords

The NRLA has previously estimated that landlords may need to invest between £6,100 and £6,800 per property to achieve EPC C compliance. While the Boiler Upgrade Scheme grants help offset some costs, landlords remain concerned about the overall financial burden, particularly as many of these expenses are likely to be passed on to tenants through rent increases. This has been acknowledged by government ministers, who have confirmed that landlords can raise rents to cover EPC upgrade costs.

Looking Ahead: Support for Landlords and Property Managers

Landlords should carefully consider the expanded Boiler Upgrade Scheme as part of their property improvement plans, especially given the growing emphasis on energy efficiency and low-carbon heating solutions. Staying informed about available grants and understanding the practical challenges of installing heat pumps will be essential for compliance and cost management.

In line with supporting landlords and property professionals, The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers across legal, trades, insurance, financial, mortgage, tenant screening, and other sectors, designed to assist landlords, tenants, and property management businesses. Service providers interested in joining can register their interest at the Landlord Association website.