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 gas boilers with low-carbon heating solutions. This development follows the Autumn Budget announcement by Chancellor Rachel Reeves, which included the replacement of the ECO scheme with the Warm Homes Plan to reduce energy bills.

Overview of the Expanded Boiler Upgrade Scheme

The Boiler Upgrade Scheme provides grants to encourage the installation of low-carbon heating technologies, such as heat pumps and biomass boilers, as part of the government’s commitment to reducing carbon emissions in the housing sector. The recent expansion means that landlords can now access a £2,500 grant specifically for air-to-air heat pumps, a technology that offers both heating and cooling benefits.

According to the National Residential Landlords Association (NRLA), the £2,500 grant will cover a significant portion of the average £3,000 installation cost for air-to-air heat pumps. Traditional air and ground-source heat pumps remain eligible for grants of up to £7,500. The scheme also plans to support heat batteries at the £2,500 level once product and installation standards are finalised, alongside efforts 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 ability to provide warmth in winter and cooling in summer. This dual functionality makes them particularly suitable for flats and smaller homes without central heating systems, expanding options for landlords looking to upgrade their properties.

The government is also offering discounts for heat batteries and consulting on other innovative clean heating technologies, including thermal storage, infrared panels, and renewable fuels. These measures aim to provide landlords with a wider range of energy-efficient heating solutions, supporting the transition to greener rental properties.

Challenges with Heat Pump Installation in the Private Rented Sector

Despite the financial incentives, installing heat pumps can be complex, especially in the private rented sector. Planning restrictions and leasehold arrangements often limit the feasibility of fitting heat pumps in houses of multiple occupation (HMOs) and leasehold flats. Rodney Townson of landlord organisation iHowz has pointed out that these administrative and direct costs can make installation unaffordable or impractical, particularly in older rental properties.

Landlords also face ongoing concerns about the costs associated with meeting the government’s proposed energy performance certificate (EPC) C targets, which are set to become mandatory by 2030 for all private rented properties, and by 2028 for new tenancies. The NRLA has estimated that landlords may need to invest between £6,100 and £6,800 per property to achieve these standards.

Many of these upgrade costs are likely to be passed on to tenants, with government ministers previously confirming that landlords can increase rents to cover EPC-related improvements. This creates a balancing act for landlords between complying with regulations, managing costs, and maintaining affordable rents.

Implications for UK Landlords and Agents

For landlords and letting agents, the expanded Boiler Upgrade Scheme represents a valuable opportunity to access funding for environmentally friendly heating systems, which can improve property appeal and compliance with future regulations. However, it is important to carefully consider the practical challenges of installation, especially in leasehold or multi-occupancy properties, and to plan for the financial implications of meeting EPC C requirements.

Understanding the available grants and the evolving regulatory landscape will be essential for landlords aiming to future-proof their portfolios and contribute to the UK’s net-zero goals. Agents can support landlords by advising on suitable technologies and navigating planning or lease restrictions.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026, designed to connect landlords, tenants, and property management businesses with verified and approved service providers. This initiative will include legal, trades, insurance, financial, mortgage, tenant screening, and other relevant services to support the sector.

Service providers interested in joining the Trusted Partners Hub can register their interest at the Landlord Association website.