The UK government has extended the Boiler Upgrade Scheme (BUS) to cover air-to-air heat pumps and heat batteries, providing landlords and homeowners with 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 also introduced the Warm Homes Plan as a replacement for the previous ECO scheme.

Overview of the Expanded Boiler Upgrade Scheme

The Boiler Upgrade Scheme, initially designed to encourage the installation of heat pumps and biomass boilers, now includes grants for air-to-air heat pumps and heat batteries. Landlords are eligible for a £2,500 grant towards installing air-to-air heat pumps, which typically cost around £3,000. Traditional air and ground-source heat pumps remain supported with grants of £7,500.

The National Residential Landlords Association (NRLA) highlights that the scheme aims to simplify the certification process for these installations and plans to support further technologies once product and installation standards are established. This expansion is intended to provide landlords with a broader range of options when upgrading heating systems, particularly benefiting those with flats or smaller properties without central heating.

Benefits and Challenges of Air-to-Air Heat Pumps

Minister for Energy Consumers Martin McCluskey emphasises that air-to-air heat pumps offer dual functionality, providing warmth in winter and cooling during summer months. This versatility makes them an attractive option for a wider range of properties, including those where traditional central heating systems may not be feasible.

However, installing heat pumps remains a complex process due to planning restrictions and property-specific challenges. Many rental properties, such as Houses in Multiple Occupation (HMOs) or leasehold flats, face additional administrative hurdles or lease constraints that can increase costs or prevent installation altogether. Older properties within the private rented sector may also pose difficulties for fitting heat pumps effectively.

Financial Implications for Landlords

While the grants reduce upfront costs, landlords remain concerned about the overall expense of meeting forthcoming energy efficiency standards. The government has proposed, though not yet legislated, that all private rented properties must achieve an Energy Performance Certificate (EPC) rating of C by 2030, with new tenancies required to meet this standard by 2028.

The NRLA has previously estimated that landlords may need to invest between £6,100 and £6,800 per property to comply with EPC C targets. These costs often translate into higher rents, as acknowledged by a government minister who confirmed that landlords can increase rents to cover EPC upgrade expenses.

Looking Ahead: Support and Opportunities for Landlords

The expanded Boiler Upgrade Scheme represents a significant step towards decarbonising heating in the private rented sector, offering landlords more options to improve energy efficiency and reduce carbon emissions. However, practical challenges and financial considerations remain key factors for landlords to assess when planning upgrades.

In addition to heat pump grants, the government is consulting on innovative clean heating solutions such as thermal storage, infrared panels, and renewable fuels, which may provide further opportunities for landlords in the future.

Trusted Landlord Association Update

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. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/