The UK government has broadened the Boiler Upgrade Scheme (BUS) to encompass 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 as a replacement for the Energy Company Obligation (ECO) scheme.

Overview of the Expanded Boiler Upgrade Scheme

The Boiler Upgrade Scheme provides grants to encourage the installation of energy-efficient heating systems, aiming to reduce carbon emissions from domestic properties. Under the expanded scheme, landlords can now access a £2,500 grant towards installing air-to-air heat pumps, which are considered a versatile option for heating and cooling homes. Traditional air and ground-source heat pumps remain eligible for a £7,500 grant, while heat batteries will also be supported at the £2,500 level once product standards and installation requirements are finalised.

The National Residential Landlords Association (NRLA) highlights that the average cost of installing an air-to-air heat pump is around £3,000, meaning the grant covers a significant portion of the expense. The government is also working to simplify the certification process for these installations, which should assist landlords in navigating the regulatory framework.

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 properties in winter and cooling them during summer months. This feature is particularly advantageous for landlords managing flats or smaller homes without central heating systems, as it offers greater flexibility when upgrading properties.

In addition to heat pumps, the government is offering discounts on heat batteries and is consulting on the potential role of other innovative clean heating technologies, such as thermal storage, infrared panels, and renewable fuels. These initiatives reflect a broader commitment to supporting low-carbon heating solutions across the private rented sector.

Challenges in Installing Heat Pumps

Despite the financial incentives, landlords face practical challenges when installing heat pumps. Planning restrictions, particularly for Houses in Multiple Occupation (HMOs) and leasehold flats, can complicate or even prevent installations. Rodney Townson from landlord organisation iHowz notes that these restrictions, along with the administrative and direct costs involved, may render heat pump installation unaffordable or unfeasible for some landlords, especially those managing older properties in the private rented sector.

Furthermore, landlords remain concerned about the overall costs associated with meeting future 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 a 2028 deadline for new tenancies. The NRLA has estimated that landlords may need to invest between £6,100 and £6,800 per property to meet these targets, a significant financial commitment.

Many of these costs are likely to be passed on to tenants through increased rents. This has been acknowledged by government ministers, who have confirmed that landlords can raise rents to cover EPC upgrade expenses. This dynamic underscores the importance for landlords to carefully consider the financial implications of energy efficiency improvements alongside available grant support.

Implications for UK Landlords and Agents

For landlords and letting agents, the expanded Boiler Upgrade Scheme presents an opportunity to improve property energy efficiency while benefiting from government grants. However, it is essential to factor in the practical challenges of installation, potential planning constraints, and the broader regulatory environment, including forthcoming EPC requirements.

Landlords should also stay informed about evolving certification processes and emerging technologies in clean heating, as these may offer additional options for upgrading properties in a cost-effective manner. Engaging with professional advice and support networks can help navigate these complexities.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is launching 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. 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 within the sector.