The UK government has extended 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 to replace the ECO scheme, aiming to reduce energy bills and promote greener heating solutions.

Overview of the Boiler Upgrade Scheme Expansion

The Boiler Upgrade Scheme, initially designed to provide grants for installing heat pumps and biomass boilers, now includes air-to-air heat pumps and heat batteries. Under the new measures, landlords can access a £2,500 grant towards installing an air-to-air heat pump, which typically costs around £3,000. Traditional air and ground-source heat pumps remain eligible for grants of up to £7,500.

The National Residential Landlords Association (NRLA) highlights that the scheme plans to support additional technologies, such as heat batteries, at the same £2,500 grant level once installation and product standards are finalised. The government is also working to simplify the certification process for these installations, which should benefit landlords seeking to upgrade their properties.

Benefits of Air-to-Air Heat Pumps for Landlords

Minister for Energy Consumers Martin McCluskey emphasises that air-to-air heat pumps provide dual functionality by heating homes in winter and cooling them during summer months. This makes them particularly suitable for flats or smaller properties without central heating systems, offering landlords more options when considering energy-efficient upgrades.

Additionally, the government is offering discounts on heat batteries and consulting on other innovative, clean heating technologies, including thermal storage, infrared panels, and renewable fuels. These developments could provide landlords with a broader range of solutions to meet future energy efficiency requirements.

Challenges in Installing Heat Pumps in Rental Properties

Despite the financial incentives, installing heat pumps in rental properties remains complex. Planning restrictions and leasehold conditions often limit the feasibility of such installations, especially in Houses in Multiple Occupation (HMOs) and leasehold flats. Rodney Townson from landlord organisation iHowz notes that these factors, combined with the age of much private rented sector stock, can increase administrative burdens and costs, making heat pump installation less affordable or practical.

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

Many of these expenses are likely to be passed on to tenants through rent increases, a point acknowledged by a government minister last year, who confirmed that landlords can raise rents to cover the costs of EPC upgrades.

Implications for UK Landlords and Agents

For landlords and letting agents, the expanded Boiler Upgrade Scheme offers a valuable opportunity to reduce upfront costs when transitioning to low-carbon heating systems. However, it is essential to consider the practical challenges of installation and the potential impact on rental income. Understanding planning restrictions, lease agreements, and the condition of rental properties will be crucial in determining the viability of heat pump installations.

Landlords should also stay informed about evolving government policies and certification requirements to ensure compliance with EPC targets and to take full advantage of available grants and incentives.

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 other sectors are invited to register their interest to join the hub via the Landlord Association website.