Heat Pump Costs and Grants in the UK (2026): What Homeowners Need to Know
Heat pump costs in the UK in 2026: the real numbers homeowners care about
Heat pumps have moved from "interesting idea" to a serious home upgrade, and the big question is still the same one: what will it cost you, after grants and tax breaks, in 2026? The answer depends on your home, your heating setup, and where you live, yet there are now clearer benchmarks than there were even a year ago.
Across the UK, a typical air to water air source heat pump installation for a standard house often lands in a broad band of about £8,000 to £15,000 before incentives, with higher quotes usually linked to larger properties, harder pipework changes, cylinder upgrades, or radiator replacements. Ground source systems can push notably higher because the groundworks are a big part of the job.
That headline range can feel punchy. The good news is that 2026 is also a year where grants and VAT relief can make the out of pocket number look very different from the first quote.
Average installed costs by location (2026 guide)
Installers price based on labour rates, access, travel time, local competition, and the type of housing stock in the area. A Victorian terrace in a tight London street tends to be a different job from a newer semi in the Midlands.
Below is a practical, homeowner focused snapshot of what many households see for a straightforward air source heat pump installation in 2026 before any grant is applied. Treat this as a guide for budgeting, not a promise.
| Location | Typical installed cost (air source, air to water) | Why it trends this way |
|---|---|---|
| London | £11,000 to £16,000 | Higher labour rates, access constraints, more complex retrofits |
| South East (outside London) | £10,000 to £15,000 | Strong demand, mixed housing types |
| Bristol and the South West | £9,500 to £14,500 | Good installer coverage, varied property types |
| Birmingham and the West Midlands | £9,000 to £13,500 | Competitive pricing, many standard family homes |
| Manchester and the North West | £9,000 to £13,500 | Similar to Midlands, some older housing stock |
| Leeds and Yorkshire | £8,500 to £13,000 | Strong competition, many mid size homes |
| Newcastle and the North East | £8,500 to £12,500 | Lower labour costs in many areas |
| Cardiff and South Wales | £9,000 to £13,500 | BUS eligible region, mixed installer density |
| Glasgow and the Central Belt | £9,000 to £14,000 | Scottish support often differs by programme, labour varies |
| Rural areas (UK wide) | £9,000 to £15,500 | Travel time, limited installer availability, higher scaffolding or access needs |
A quick reality check helps here: when someone says their system was "£6,000 installed", they are often talking about the price after the grant. When someone quotes "£18,000", it can be a larger home, a premium brand package, significant radiator upgrades, or a challenging install.
What usually drives the quote up or down?
Heat pump pricing is rarely a single line item. If you want to control costs, it helps to know what you are paying for.
Common cost drivers include:
- Heat loss and sizing: bigger heat demand usually means a larger unit and more work around emitters.
- Radiator and pipework changes: many homes need some radiator upgrades, occasional pipework changes, and in some cases new valves.
- Hot water cylinder: air to water systems often need a compatible cylinder, and that can add a meaningful amount.
- Electrical work: consumer unit upgrades and external isolators can be required.
- Outdoor unit positioning: long pipe runs, brackets, condensate management, and noise considerations can add labour time.
- Controls and commissioning: getting a heat pump to run efficiently is not "set and forget". You are paying for design, setup, and testing.
One thought to sit with: the cheapest quote is not always the lowest lifetime cost. A well designed system that runs at lower flow temperatures can pay you back every winter.
The £7,500 Boiler Upgrade Scheme: how it changes your quote
If you are in England or Wales, the Boiler Upgrade Scheme is still the headline incentive for most homeowners considering an air source or ground source heat pump.
Here is the part that matters when you are comparing quotes: the BUS grant is deducted upfront. Your installer applies for it and you should see the discount built into the paperwork rather than waiting for a cheque after the job.
What the BUS covers in 2026
For eligible properties, understanding heat pump grant eligibility requirements is crucial when evaluating your options. The BUS offers:
- Up to £7,500 for air source heat pumps (air to water)
- Up to £7,500 for ground source heat pumps
- £5,000 for biomass boilers in eligible situations
A homeowner example makes this feel real:
You receive a quote for an air source heat pump installation in Sheffield at £12,250. If you qualify for BUS, the installer deducts £7,500, leaving £4,750 for you to pay, plus any non eligible extras that sit outside the grant conditions.
That is why 2026 can be a tipping point year. Many households now find the net price sits closer to what a premium boiler replacement and radiator refresh could cost.
BUS eligibility basics (homeowner version)
Eligibility details can be nuanced, yet the most common requirements in 2026 look like this:
- The property is in England or Wales.
- You own the property, including owner occupiers and landlords.
- The installation is carried out by an MCS certified installer.
- The system meets scheme rules around design and performance.
- You generally need a valid EPC with no outstanding recommendations for loft or cavity wall insulation, where those measures are suitable for the home.
Your installer should walk you through this, although it is worth asking early, because the fastest way to waste time is designing a system that cannot be grant funded.
The new £2,500 grant in 2026: air to air heat pumps and heat batteries
2026 has brought a notable expansion in support: a £2,500 grant for air to air heat pumps and for heat batteries.
Air to air heat pumps are often discussed in the same breath as air conditioning, yet the key homeowner point is simpler: they can deliver space heating efficiently, and in many cases they can also provide cooling. Whether cooling is permitted or restricted within the grant rules depends on the scheme conditions and the way the system is specified.
Heat batteries are different. They store heat for later use, which can pair well with off peak electricity and with homes that want more control over when energy is used.
Who is this £2,500 support likely to help most?
- Flats and smaller homes where an air to water system is awkward.
- Homes that want targeted heating for occupied rooms.
- Properties where a full wet system overhaul would be costly.
- Households interested in time of use tariffs and storing heat for later.
A sensible question to ask yourself is: what problem are you solving? Whole home heat, hot water, zoning, summer comfort, or a blend of these. That answer often points you toward air to water, air to air, or a hybrid plan that includes storage.
0% VAT on energy saving materials: the quiet discount many people forget
A lot of households focus on the grant, then overlook VAT. In 2026, the UK's temporary VAT relief means a 0% VAT rate applies to the installation of certain energy saving materials, including heat pumps, for the relief window that runs until 31 March 2027.
What does that mean in plain terms? If you would normally pay 20% VAT on an installation, moving to 0% can shave a sizeable amount off the total.
Here is a simple way to think about it:
- If a qualifying part of your project is £10,000 before VAT, 20% VAT would have added £2,000.
- At 0% VAT, that £2,000 does not appear on the bill for the qualifying scope.
Your installer should itemise the quote clearly so you can see what is inside the VAT relief and what is not.
What you might still need to budget for
Grants reduce the core installation cost, yet some work sits outside what is covered or becomes necessary once the house is properly assessed.
Budget items that can crop up include:
- Radiator upgrades in key rooms to keep flow temperatures low.
- Insulation top ups so the system can be sized sensibly.
- Hot water cylinder replacement for air to water systems.
- Electrical upgrades, especially if the consumer unit is dated.
- Smart controls and room thermostats if your current setup is basic.
For homeowners doing a broader renovation, underfloor heating can be part of a heat pump friendly approach because it often runs at lower temperatures. If you are sourcing materials, ThermRite is a supplier many renovators consider when planning a low temperature heating setup.
How to apply for heat pump grants in 2026 (without getting lost)
Paperwork feels like the boring part, yet it often decides whether your project stays affordable.
Step by step: BUS application route
For the Boiler Upgrade Scheme, the application is typically handled by the installer.
- Find an MCS certified installer and book a site survey.
- Ask for a heat loss calculation and a clear written quote that shows the BUS deduction.
- Confirm your EPC status and deal with any required insulation recommendations where applicable.
- Agree the quote, then your installer applies for the voucher.
- Installation goes ahead, then the installer redeems the voucher after completion.
Step by step: the £2,500 grant route
The exact process can vary depending on how the expanded support is administered, yet the practical starting point is the same: use an accredited installer, confirm product eligibility, and get the grant reflected in the quote.
When you speak to an installer, ask these questions early:
- Is this specific system eligible for the £2,500 support in 2026?
- Will the grant be deducted upfront on the quote?
- What standards and certifications are required?
A homeowner focused checklist before you sign anything
A heat pump can be a brilliant upgrade, yet it rewards careful planning.
- Get at least two surveys so you can compare system design, not just price.
- Ask for the flow temperature target in writing.
- Confirm what is included around hot water, especially cylinder size and reheat time.
- Request a clear plan for noise and placement, including condensate drainage.
- Check the quote shows grant deduction and 0% VAT where applicable.
Where this leaves you
Heat pumps in 2026 are still an investment, yet grants of up to £7,500 through the Boiler Upgrade Scheme, plus the new £2,500 support for air to air heat pumps and heat batteries, can bring the net cost into a far more realistic range for many households. Pair that with 0% VAT on eligible energy saving materials until 31 March 2027, and you have a window where upgrading can be materially cheaper than it looks on first glance.
A good next move is simple and practical: book a proper home survey and ask for a fully itemised quote that shows the grant and VAT treatment clearly, then decide based on design quality and running cost expectations, not the headline number alone.
Frequently Asked Questions
How much will I actually pay after the £7,500 BUS grant?
Many straightforward air source heat pump installations quoted around £10,000 to £15,000 can drop into the £2,500 to £7,500 out of pocket range after BUS, depending on property size and how much extra work is needed for radiators, pipework, electrics, and hot water.
Does the Boiler Upgrade Scheme apply across the whole UK?
The BUS is for England and Wales. Scotland and Northern Ireland have different support routes and eligibility rules, so the right first step is checking what is available where the property is located.
Will the grant be paid to me or deducted from the quote?
For BUS, the discount is normally deducted upfront by the installer. You agree a quote that already shows the grant value taken off, then the installer claims it after the installation is completed.
What is the 0% VAT rule and how long does it last?
The UK has a temporary VAT relief where certain energy saving materials, including heat pumps, can be installed at 0% VAT. The current relief window runs until 31 March 2027, after which the rate is scheduled to change unless government policy extends it.
Who is the new £2,500 grant aimed at in 2026?
The £2,500 support is designed for air to air heat pumps and heat batteries, helping households that might not want, or be able to install, a full air to water system. Whether heat pump grants are worth pursuing depends on the specific product and scheme conditions, so confirmation needs to happen before you sign a contract.