Heat pumps for landlords: grants, rules and what to plan for

If you let a home whose gas boiler is near the end of its life, a heat pump is one option. This guide is general information, not legal or tax advice: check your own obligations for each property, and take professional advice where your situation is unusual.

Can landlords get the Boiler Upgrade Scheme grant?

Often, yes. GOV.UK says you must own the property, “including if it’s a business, a second home, or a property you rent out to tenants”, and be replacing fossil fuel heating, which it lists as oil, gas, electric or LPG. If the rules fit, you may be eligible for £7,500 towards an air source heat pump (see the Boiler Upgrade Scheme explained). The rules that matter most for landlords:

• One grant per property. Ofgem says owners of several properties may apply for each legally separate one.
• No social housing. A former council home bought under Right to Buy and now privately owned may be eligible.
• No earlier public funding for low carbon heating in the property, such as ECO or the Renewable Heat Incentive.
• A size limit of 45 kWth for an individual system, which must meet all of the property’s space heating needs.
• No hybrids (a heat pump paired with a gas boiler), and most new builds are excluded.

Two old hurdles have gone. The insulation requirement was removed on 8 May 2024 (S.I. 2024/524), and since 28 April 2026 a property no longer has to have a valid EPC to be eligible (S.I. 2026/390).

An MCS-certified installer applies on your behalf and takes the grant off your quote. Ofgem then asks you to confirm the details, including, if you do not live in the property, that you have told the tenant about the impact of the installation. An air source voucher lasts three months from issue, so line up tenant access first.

MEES: the minimum EPC rating for rented homes

The rule today: EPC E

GOV.UK says you must have an EPC when renting out a property. The Minimum Energy Efficiency Standard (MEES) Regulations then apply to private rented homes in England and Wales on assured, regulated or domestic agricultural tenancies (in Wales, most standard occupation contracts) that are legally required to have one: since 1 April 2020 you cannot let, or continue to let, one rated F or G unless you have registered a valid exemption. You are not currently required to spend more than £3,500 including VAT. Exemptions include high cost, all relevant improvements made, and third-party consent refused by someone such as a freeholder or the planning department; most last 5 years. Councils enforce the rules, with fines of up to £5,000 per property.

What is coming: a standard equivalent to EPC C by 2030

In its response of 21 January 2026, the government decided on a single compliance date of 1 October 2030 for all tenancies, a cost cap of £10,000 (or 10% of the property’s value, if lower) with a 10-year exemption once the cap is spent, recognition of a current EPC of C or above (rated before 1 October 2029) until it expires, and a maximum fine of £30,000 per property, per breach.

None of this is law yet. The government said it would seek new powers by Act of Parliament, then lay regulations aimed to come into force in 2027. The King’s Speech in May 2026 announced an Energy Independence Bill to “implement new rules to ensure landlords invest in home upgrades”, but when we checked Parliament’s list of bills on 19 October 2026 it had not been introduced. For now, E is the legal minimum.

Where a heat pump fits

Under the planned standard, a home must first meet a fabric performance standard, then the landlord chooses between a heating system standard (for example a heat pump, with controls and radiators) and a smart readiness standard. The government says it is “not the intention of government to require landlords to install a heat pump”, and that Boiler Upgrade Scheme funding will not count towards the £10,000 cap.

It also says today’s EPC can penalise people “for doing the right thing by installing low carbon heating systems, such as heat pumps”. New-style EPCs, with four headline metrics (energy cost, fabric performance, heating system and smart readiness), were due in October 2026, but on 9 March 2026 the launch was moved to the second half of 2027. So we will not promise that a heat pump moves a home to any particular band; if the rating matters, ask an energy assessor before you commit.

Gas and electrical safety checks with a heat pump

The gas safety check

Under regulation 36 of the Gas Safety (Installation and Use) Regulations 1998, which cover England, Wales and Scotland, a landlord must have each gas appliance and flue checked for safety within 12 months of installation and at intervals of not more than 12 months after that. The regulations define a gas appliance as one designed for use by a consumer of gas. A heat pump runs on electricity and burns no gas, so it has no gas safety check.

If a heat pump replaces the only gas appliance, there is nothing left for the annual check to cover. Two caveats: a gas hob or fire you keep still needs its yearly check, and the duty to keep gas fittings safe includes pipework, so ask the installer what will happen to the unused supply. More in heat pump maintenance.

Electrical safety

In England, every electrical installation in a rented home must be inspected and tested by a qualified person before a tenancy starts and at least every 5 years, with the report (usually an EICR) given to existing tenants within 28 days. GOV.UK says the inspection covers the fixed electrical parts, including permanently connected equipment and circuits for specialist equipment such as solar PV. A heat pump’s supply circuit is fixed wiring, so expect it to be tested too. In Wales, you must have a valid electrical condition report for each period of occupation, valid for up to 5 years, with a copy to the contract-holder within 14 days. Keep the paperwork for any new circuit and any Building Regulations notification, which the MCS standard requires before handover where the installer is responsible for it.

Installing in a let property: tenants, access and handover

Tell tenants early. Cover where the outdoor unit will go, which rooms the installer needs, how long heating and hot water will be off, and how hot water will be provided afterwards (ask the installer to spell this out). See what to expect from an installation.

Access. GOV.UK’s guidance says you must give at least 24 hours’ notice to enter, and the tenant can stay during repairs. If the home will be temporarily unfit to live in, agree in writing how long the works will last and the tenant’s right to return; if the work is very disruptive, the tenant may be able to claim a rent reduction. Wales has its own tenancy law, so check the Welsh rules there.

Handover. The MCS commissioning checklist asks whether the controls have been explained to the customer. That is you, so ask the installer to show your tenant as well. A householder leaflet from the government-funded Electrification of Heat trial makes the main points:

• Do not turn the heating off manually; schedule a few degrees cooler when out or overnight.
• Radiators will feel less hot to the touch than with a boiler. That is normal.
• Turning the thermostat up will not heat the room faster, and avoid changing the installer’s settings.

The trial’s report concluded that systems should run at low flow temperatures for as much of the time as possible. Keep the commissioning documents and service records with your other safety paperwork.

Heat pumps for flats, blocks and HMOs

Flats. In England, permitted development allows only one air source heat pump on a whole block of flats, including its grounds, with an outdoor unit of no more than 0.6 cubic metres; Wales has its own rules. Your lease will tell you whether you need permission to make alterations, and if the unit or pipes would go on walls, a roof or grounds you do not own, you will normally need the owner’s agreement. See can you get a heat pump in a flat?, and if there is nowhere for an outdoor unit, heat pumps without an outdoor unit.

HMOs. GOV.UK says a property is an HMO if at least 3 tenants live there, forming more than one household, and share a toilet, bathroom or kitchen. In England, one with 5 or more people must be licensed (Wales sets its own licensing conditions), and you must tell the council if you plan to make changes to an HMO. The electrical rules apply, and you will need access to every room getting a radiator, with notice to each tenant. The government also intends that a whole HMO should have a valid EPC when a single room is let.

Running costs: who pays, and what to tell tenants

Where tenants pay the energy bills, the running cost falls on them; where bills are included, as is common in HMOs, it is yours. Whether a heat pump costs more or less than the system it replaces depends on how efficiently it runs, the tariff and the home, so we make no promises of lower bills. See how much electricity does a heat pump use? and heat pump vs gas boiler running costs.

How much does a heat pump cost for a rental property?

The installation cost depends on the property: the size of system it needs, set by a heat loss calculation; whether radiators or pipework need upgrading (see do I need new radiators?); where the outdoor unit goes and how long the pipe run is; how hot water will be provided; and any electrical work. Get in touch and we will arrange a free survey of the property and give you a clear, itemised quote; if you are happy with it, we can go ahead. You may be eligible for the £7,500 Boiler Upgrade Scheme grant, which only an MCS-certified installer can apply for; ByEco’s certification is in progress. More in our heat pump cost guide.

Heat pumps installed in homes are zero-rated for VAT until 31 March 2027. And Annex A of the January 2026 government response says a heat pump that replaces an existing heating system can be an allowable expense against rental income, while a first heating system is capital. Ask your accountant.

What to ask an installer, and where ByEco stands

• Will you do a room-by-room heat loss calculation, and what flow temperature is the system designed for?
• How will hot water be provided, and what happens to the gas supply?
• How long will heating and hot water be off, and which rooms do you need?
• Will you explain the controls to my tenant, and which documents will I get at handover?

ByEco installs air source heat pumps across Greater Manchester, in houses and flats. Our MCS and TrustMark certification is in progress, so we cannot yet lodge a Boiler Upgrade Scheme application for you; only an MCS-certified installer can. See our heat pumps page or contact us with the address and a photo of where an outdoor unit might go.

Sources

Every figure on this page was checked against primary sources on 19 October 2026. Grant rules, planning rules and prices change — if you are reading this much later, verify before acting.

• GOV.UK — Apply for the Boiler Upgrade Scheme: check if you’re eligible
• GOV.UK — Apply for the Boiler Upgrade Scheme: what you can get
• Ofgem — Boiler Upgrade Scheme: guidance for installers (V5.1, last updated 2 July 2026)
• Ofgem — Boiler Upgrade Scheme guidance for installers V5.1 (PDF)
• legislation.gov.uk — Boiler Upgrade Scheme (England and Wales) (Amendment) Regulations 2024
• legislation.gov.uk — Boiler Upgrade Scheme (England and Wales) (Amendment) Regulations 2026
• legislation.gov.uk — Boiler Upgrade Scheme (England and Wales) Regulations 2022, regulation 15
• GOV.UK — Domestic private rented property: minimum energy efficiency standard – landlord guidance
• DESNZ — Improving the energy performance of privately rented homes: government response (21 January 2026)
• GOV.UK — Reforms to the Energy Performance of Buildings regime (update of 9 March 2026)
• GOV.UK — Reforms to the Energy Performance of Buildings regime: partial government response
• Prime Minister’s Office — The King’s Speech 2026: background briefing notes (PDF)
• GOV.UK — Selling a home: Energy Performance Certificates
• GOV.UK — Renting out your property
• legislation.gov.uk — Gas Safety (Installation and Use) Regulations 1998, regulation 36
• legislation.gov.uk — Electrical Safety Standards in the Private Rented Sector and Social Rented Sector (England) Regulations 2020, regulation 3
• GOV.UK — Electrical safety standards in the private and social rented sectors: guidance
• legislation.gov.uk — Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022, regulation 6
• legislation.gov.uk — General Permitted Development Order 2015, Schedule 2, Part 14
• MCS — MIS 3005-I:2025 Heat Pump Installation Standard, Issue 1.0
• Energy Systems Catapult — Your new heat pump: Electrification of Heat user guide (PDF)
• HMRC — VAT on energy-saving materials and heating equipment (Notice 708/6)