How Much Does a Heat Pump Cost in the UK? (2026 Guide)

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 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.

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.

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.

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.