In 2024 heat pump installations grew by 63%, with nearly 100,000 hydronic heat pumps sold across the country (What Heat Pump, 2025). 

As the UK continues its transition to low-carbon heating solutions, more homeowners are considering heat pumps as an alternative to traditional gas boilers. But understanding the costs involved can be challenging, with prices varying significantly based on numerous factors. In this article we’ll break down everything you need to know about the costs of purchasing and installing a heat pump in your home.

How Do Air Source Heat Pumps Work?

Before diving into costs, it’s important to understand what you’re investing in. Air source heat pumps are renewable heating systems that extract heat from the outside air and transfer it to your home’s heating system. This is in contrast to gas boilers which work through combustion. Because heat pumps are a renewable source of heating they are more friendly to the environment and help reduce your carbon footprint.

The two main types of air source heat pumps

• Air-to-water heat pumps These are the most common. They work by distributing heat via wet central heating systems (radiators or underfloor heating) they provide both heating and hot water.

• Air-to-air heat pumps These distribute heat via warm air circulated by fans but don’t provide hot water.

The efficiency of heat pumps comes from their ability to produce 3-4 units of heat for every unit of electricity used, making them approximately 80% more carbon-efficient than traditional gas boilers.

How Much Do Heat Pumps Cost?

Initial Installation Costs

The cost of installing an air source heat pump varies based on several factors, but you can expect to pay between £7,000 to £13,000 for a standard installation.

Here is a more detailed breakdown by property size:

Property Size	Air-to-Air Heat Pump	Air-to-Water Heat Pump
1 bedroom	£1,900 (2.5kW)	£8,000 (4kW)
2-3 bedrooms	£3,000 – £4,000 (9.5kW	£13,000 (13kW)
4-5 bedrooms	£4,000 + (11.5kW)	£16,500 (16kW)

Factors Affecting Installation Costs

The main factors that will affect the overall installation cost of a new Air to Heat or Air to Water Heat Pump are:

1. Property Size and Heat Demand

Larger homes or poorly insulated properties require more powerful heat pumps to maintain comfortable temperatures. A bigger heat pump will be more expensive to purchase and will increase your installation costs.

2. Current Heating System

If you’re switching from a traditional gas boiler, you may need additional modifications to your existing heating system. Properties with underfloor heating already installed typically require fewer modifications than those with standard radiators.

3. Insulation Levels

Heat pumps work most efficiently in well-insulated homes. If your property has poor insulation, you might need to invest in improvements before or alongside your heat pump installation to ensure optimal performance.

4. Additional Work Required

Many homes require supplementary work to accommodate a heat pump system:

• Radiator upgrades Heat pumps operate at lower temperatures than gas boilers, so larger radiators may be needed at approx £200-£400 per radiator.

• New pipework Heat pumps require higher flow rates, so existing narrow pipes might need upgrading

• Hot water cylinder If you don’t already have one, this will be an additional cost of around £800-£1,200.

Government Grants and Financial Support

As the UK government continues its charge toward net zero, they offer significant financial support to encourage heat pump adoption through various schemes.

Boiler Upgrade Scheme (BUS)

For air to water heat pumps only, the most substantial support comes from the Boiler Upgrade Scheme, which is open to all homeowners in England and Wales up until April 2028. Under this scheme homeowners can receive up to £7,500 towards the cost of installation.

Homeowners apply directly through their installer, meaning you only pay the remaining cost. 

Additional Support

Other financial support includes:

• 0% VAT Until March 2027, heat pump installations benefit from 0% VAT (a 5% saving)

• Regional grants Programs like the Warm Homes Programme Wales (offers up to £5,000 towards installation) and Home Energy Scotland Grant (up to £7,500)

• ECO4 scheme Provides up to 100% coverage for low-income and vulnerable households

Running Costs: What to Expect

While the upfront cost of heat pumps is higher than traditional boilers, the running costs can be lower in many cases. The Typical range would be between £855 to £1,700 annually, depending on your home’s size and efficiency. This is equal to around a £290 annual saving when compared to a gas boiler.

Below highlights the typical annual saving per property size and EPC rating:

EPC Rating	1–2 Bedrooms	3–4 Bedrooms	5+ Bedrooms
A (90%)	£5 saving	£7 saving	£10 saving
B (86%)	£29 saving	£45 saving	£66 saving
C (82%)	£54 saving	£82 saving	£122 saving
D (78%)	£78 saving	£120 saving	£177 saving

Maximizing Efficiency and Savings

With a new heat pump installed you’ll want to make sure you’re running it as efficiently and cost effectively as possible. With this in mind you should consider:

• Smart tariffs Heat pumps pair well with time-of-use tariffs like Octopus Energy’s Cosy Octopus.

• Removing gas meters If you go all-electric, removing your gas meter can save around £105 annually in standing charges.

• Smart controls By installing smart controls with the correct and optimal programming you can significantly improve efficiency.

Maintenance and Servicing Costs

Just like gas boilers, a heat pump will require regular maintenance to keep it running at its best and you can expect an annual service to cost approximately £200.

Most manufacturers will offer 5-8 year warranties which is great for peace of mind, and you can expect a well maintained and serviced heat pump to last you around 15-20 years, which is more than the typical 10-15 you might expect from a gas boiler.

The Installation Process: What to Expect

Before any installation gets underway we at Custom Heat would come and do a full assessment of your property to give you exact timelines and let you know what to expect. Here’s a brief outline of what you can expect from the entire process from end to end.

Pre-Installation

1. Initial assessment A Custom Heat surveyor will evaluate your property’s suitability and heating requirements.

2.  System design Our installer will design a system specific to your home’s needs.

3.  Quote provision You receive a detailed quote including all necessary work.

Installation Timeline

Installation can typically take 2-4 days depending on complexity, and you can expect some slight disruption (some noise and temporary heating interruption) whilst work is being carried out.

Making an Informed Decision

Heat pumps represent a significant investment in your home’s future, providing you with lower running costs, independence from volatile gas prices and helping you improve your carbon footprint.

At Custom Heat, we understand that every home is unique, and we’re committed to helping you navigate the transition to low-carbon heating. Our expert team provides comprehensive assessments, transparent pricing, and ongoing support to ensure your heat pump delivers optimal performance for years to come.

Ready to explore whether a heat pump is right for your home? Contact Custom Heat today for a no-obligation assessment and discover how we can help you make the switch to efficient, sustainable heating.