The UK government has expanded the Boiler Upgrade Scheme (BUS) to include 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 outlined the replacement of the ECO scheme with the Warm Homes Plan to reduce energy bills.

Overview of the Boiler Upgrade Scheme Expansion

The Boiler Upgrade Scheme provides grants aimed at encouraging the installation of low-carbon heating technologies. Previously, the scheme supported air and ground-source heat pumps and biomass boilers. The recent expansion now includes air-to-air heat pumps, with landlords eligible for a £2,500 grant towards installation costs. This is significant as the average installation cost for air-to-air heat pumps is around £3,000, making the grant a substantial contribution.

In addition to air-to-air heat pumps, the government intends to support heat batteries at the same grant level of £2,500 once installation and product standards are finalised. The scheme is also working to simplify the certification process for these installations, which should reduce administrative burdens for landlords and installers alike.

Benefits of Air-to-Air Heat Pumps for Landlords

According to the National Residential Landlords Association (NRLA), air-to-air heat pumps offer a versatile solution by providing heating in winter and cooling in summer. This dual functionality is particularly advantageous for tenants in flats or smaller homes that may lack central heating systems. The availability of grants for these systems increases the options landlords have when upgrading properties to meet evolving energy efficiency standards.

Minister for Energy Consumers Martin McCluskey emphasised the government’s aim to broaden access to heat pumps, stating: “Air-to-air heat pumps offer the best of both worlds, keeping you warm in winter while cooling you down when summer comes along.” He also highlighted ongoing consultations on other clean heating technologies, including thermal storage, infrared panels, and renewable fuels, which may become relevant for landlords in the future.

Challenges in Installing Heat Pumps

Despite the financial incentives, installing heat pumps remains challenging for many landlords. Planning restrictions and leasehold conditions can complicate or prevent installation, especially in Houses in Multiple Occupation (HMOs) and leasehold flats. Rodney Townson from landlord organisation iHowz noted that these restrictions, combined with the age of much private rented sector stock, can make fitting heat pumps unaffordable or impractical.

Landlords also face concerns about the costs associated with meeting the government’s proposed energy performance certificate (EPC) requirements. The government has proposed that all private rented properties must achieve at least an EPC C rating by 2030, with new tenancies required to meet this standard by 2028. The NRLA has estimated that landlords may need to spend between £6,100 and £6,800 per property to comply with these targets.

Many landlords are likely to pass these costs onto tenants through rent increases. This has been acknowledged by government ministers, who have confirmed that landlords can raise rents to cover the expense of EPC upgrades.

Implications for UK Landlords

The expansion of the Boiler Upgrade Scheme to include air-to-air heat pumps and heat batteries presents an opportunity for landlords to access financial support for low-carbon heating installations. This is particularly relevant as landlords prepare to meet stricter EPC requirements and seek to improve the energy efficiency of their properties.

However, landlords should be aware of the practical challenges involved, including planning restrictions and upfront costs that may not be fully covered by grants. Careful consideration and planning will be necessary to navigate these complexities and ensure compliance with future regulations.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 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 other sectors are invited to register their interest to become part of this network.

Landlords and agents can look forward to accessing reliable and vetted services through this initiative, which aims to simplify property management and compliance efforts.