Guide
How Much Does a Heat Pump Cost in the UK? (2026 Guide)
Heat pumps typically cost between £8,000 and £15,000 installed for an air source unit, or £15,000 to £35,000 for ground source. With the Building Upgrade Scheme grant of £7,500 and the 0% VAT rate valid until March 2027, the real cost for most households is substantially lower than these headline figures suggest.
Our free calculator gives you a cost estimate tailored to your property, including grants and running cost comparison.
Try the calculatorQuick Cost Summary by Property Size
| Property Type | Air Source (Installed) | Ground Source (Installed) | Net Cost (After Grant) |
|---|---|---|---|
| 1-2 bed flat/terrace | £8,000-£10,000 | £18,000-£22,000 | £500-£2,500 |
| 3-4 bed detached | £11,000-£15,000 | £22,000-£30,000 | £3,500-£7,500 |
| Large period property | £14,000-£18,000 | £28,000-£35,000 | £6,500-£10,500 |
Air Source Heat Pump Costs
An air source heat pump sits outside your property and extracts heat from the ambient air, even in cold conditions. Installation typically costs between £8,000 and £15,000.
For a straightforward 3-4 bedroom home with adequate space and reasonable access, expect to pay around £12,000 installed. This includes the unit, removal of your old boiler, pipework, wiring, commissioning, and a standard warranty.
Costs push higher if you need new radiators or underfloor heating (adds £3,000-£8,000), extensive pipework runs (£1,000-£2,000), or if your existing heating system needs significant conversion work.
Ground Source Heat Pump Costs
Ground source heat pumps are significantly more expensive because they require drilling boreholes or installing ground loops. Installation costs range from £15,000 to £35,000 depending on ground conditions and property layout.
Ground source systems are far more efficient than air source (COP of 4-5 vs 3-4), so they deliver greater energy savings over time. The main variable is geology: clay and chalk are cheaper to drill, while rocky ground significantly increases costs.
Running Costs: Heat Pumps vs Gas Boilers
A modern heat pump costs roughly £800 to £1,200 per year to run, depending on your home's size, insulation, electricity tariff, and heating demand. A gas boiler costs approximately £1,000-£1,400 per year, giving modest savings of 10-20% on fuel costs.
The comparison looks better when you factor in grants. After the £7,500 BUS grant, an air source heat pump costs roughly £1,500-£2,500 net - often less than a new boiler installation.
Running costs swing significantly with the electricity tariff you use. Heat-pump-specific tariffs like Octopus Cosy require a working SMETS2 smart meter for half-hourly settlement — without one, you pay the standard Ofgem unit rate and most of the heat-pump-vs-gas savings disappear.
Running Cost Comparison
| Home (standard) | Home (EV tariff) | Public charger | Petrol | |
|---|---|---|---|---|
| Cost per mile | 7-10p | 2-3p | 15-25p | 16-22p |
| Annual (8,000 mi) | £560-£800 | £160-£240 | £1,200-£2,000 | £1,280-£1,760 |
The Building Upgrade Scheme (BUS) Grant
The BUS offers £7,500 towards the cost of an air or ground source heat pump for UK homeowners. Most owner-occupied properties qualify. Your installer must be MCS-registered, and they typically handle the paperwork. Payment arrives 4-6 weeks after application.
The scheme was extended until 2027, and 0% VAT on installations is confirmed until 31 March 2027. After that date, VAT reverts to 20%, making installations noticeably more expensive.
Is a Heat Pump Worth the Cost?
For most homeowners, yes - particularly when grants are available. After the £7,500 BUS grant and 0% VAT, air source installations often cost less than replacing a gas boiler. Payback periods are typically 8-12 years for air source, 12-18 for ground source.
If your boiler is over 12 years old and you plan to stay in your home for the next decade, installing now is financially sensible. If your boiler is relatively new, waiting 2-3 years for further price reductions is reasonable.
Frequently Asked Questions
How much does a heat pump cost in the UK?
An air source heat pump costs £8,000-£15,000 installed for a typical UK home in 2026. Ground source heat pumps cost £15,000-£35,000 because of the borehole or ground array. With the £7,500 Boiler Upgrade Scheme (BUS) grant and 0% VAT until March 2027, the real cost of an air source install is often £4,000-£8,500 — broadly comparable to a high-end gas boiler replacement.
Is the £7,500 heat pump grant still available in 2026?
Yes. The Boiler Upgrade Scheme (BUS) pays £7,500 toward an air source or ground source heat pump and is confirmed running until 2028. Your installer must be MCS-registered and they handle the application on your behalf. Payment lands 4-6 weeks after the install. 0% VAT on the installation is also confirmed until 31 March 2027 — after that, VAT reverts to 20% and the real cost rises noticeably.
Are heat pumps cheaper to run than a gas boiler?
Usually, yes — but only with the right tariff. A modern air source heat pump runs at a coefficient of performance (COP) of 3-4, meaning it delivers 3-4 units of heat for every 1 unit of electricity. On a heat-pump-specific tariff like Octopus Cosy (12-15p/kWh off-peak), a well-insulated home pays around £800-£1,100 per year for heating and hot water, vs £1,000-£1,400 on gas. On the standard Ofgem unit rate of 24.5p/kWh, the savings disappear — so a smart meter and an EV/heat-pump tariff are essential to make the numbers work.
Do I need to replace my radiators for a heat pump?
Often, yes — at least some of them. Heat pumps run at a lower flow temperature (40-50°C) than gas boilers (70-80°C), so radiators need to be larger to deliver the same heat output. A good installer will do a room-by-room heat loss survey and tell you exactly which radiators need upsizing. Budget £100-£250 per replacement radiator on top of the headline install cost. Underfloor heating, where present, works particularly well with heat pumps without modification.
How long do heat pumps last?
An air source heat pump lasts 15-20 years with annual servicing — comparable to a modern gas boiler. Ground source heat pumps last 20-25 years on the indoor unit and 50+ years on the buried ground loop. Most major manufacturers (Vaillant, Mitsubishi, Daikin, Samsung) offer 5-7 year warranties as standard, extendable to 10 years through MCS-registered installers.
Is an air source or ground source heat pump better?
For most UK homes, air source. It's cheaper to install (£8,000-£15,000 vs £15,000-£35,000 for ground source), the BUS grant is the same £7,500 either way, and modern units run efficiently down to -15°C outdoor temperature. Ground source makes financial sense only if you have a large garden suitable for trenching, a long-term horizon (15+ years), and high heat demand — typically a large detached or rural property. The running cost gap between the two is real but usually doesn't justify the upfront premium.
Use our free calculator to get a cost estimate based on your property size, insulation, and heating system.
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