The UK government has broadened its Boiler Upgrade Scheme (BUS) to encompass air-to-air heat pumps and heat batteries, providing landlords and homeowners with additional financial support to replace gas boilers with low-carbon heating alternatives. This development follows Chancellor Rachel Reeves’ Autumn Budget announcement, which introduced the Warm Homes Plan as a replacement for the ECO scheme, aiming to reduce energy bills while promoting greener heating solutions.

Overview of the Expanded Boiler Upgrade Scheme

The Boiler Upgrade Scheme offers grants to encourage the installation of low-carbon heating systems, such as heat pumps and biomass boilers, in place of traditional gas boilers. The recent expansion means landlords can now access a £2,500 grant specifically for air-to-air heat pump installations, which typically cost around £3,000. Traditional air and ground-source heat pumps remain eligible for grants of up to £7,500.

In addition, the government plans to support heat batteries at the same £2,500 grant level once product and installation standards are finalised. Efforts are also underway to simplify the certification process for these installations, making it easier for landlords to upgrade their properties with approved low-carbon technologies.

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 they provide both heating in winter and cooling in summer. This dual functionality makes them particularly suitable for flats or smaller homes without central heating systems, offering landlords and tenants greater flexibility when upgrading properties.

Furthermore, the government is consulting on additional clean heating technologies, including thermal storage, infrared panels, and renewable fuels, alongside offering discounts for heat batteries. These initiatives aim to broaden the range of options available to landlords seeking to improve energy efficiency and comply with forthcoming regulations.

Challenges in Installing Heat Pumps in Rental Properties

Despite the financial incentives, landlords face practical challenges when installing heat pumps, especially in HMOs or leasehold flats. Planning restrictions and leasehold conditions can impose administrative hurdles and additional costs, making it difficult or unaffordable to fit heat pumps in certain properties. Older housing stock in the private rented sector also presents complications for retrofitting these systems.

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

Many of these costs are likely to be passed on to tenants, as government ministers have acknowledged that landlords can increase rents to cover EPC upgrade expenses. This highlights the importance for landlords to carefully consider the financial and regulatory implications of installing heat pumps and other energy efficiency measures.

Implications for UK Landlords and Agents

The expanded Boiler Upgrade Scheme offers landlords a valuable opportunity to reduce the upfront costs of installing low-carbon heating systems, supporting compliance with future EPC regulations and contributing to the UK’s net-zero goals. However, landlords should be aware of the potential planning and leasehold restrictions that may affect their ability to install heat pumps, especially in multi-occupancy or leasehold properties.

Agents and property managers should advise landlords on the available grants and emerging technologies, as well as the importance of early planning to navigate any administrative barriers. Staying informed about government consultations and evolving standards will be essential to managing the transition to greener heating solutions effectively.

Looking Ahead: Trusted Partners Hub Launch

In related news, 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. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest to join the hub, which aims to streamline access to trusted services for the rental sector.