An air source heat pump typically costs £8,000 to £15,000 installed in a 3 bed home before the grant, including the hot water cylinder and any radiator changes, and £12,000 to £20,000 for a larger house. The £7,500 Boiler Upgrade Scheme grant comes off that figure, so most 3 bed homes pay a net £500 to £7,500. Installation is 0% VAT until 31 March 2027.
Key takeaways
- Typical installed cost for a 3 bed home: £8,000 to £15,000 before the grant, with cylinder and radiator changes included; £12,000 to £20,000 for a larger home.
- The Boiler Upgrade Scheme pays £7,500, or £9,000 for oil or LPG homes with no mains gas between 21 July 2026 and 31 March 2027. The MCS installer applies and takes it off the quote.
- Heat pump installation is 0% VAT until 31 March 2027, then 5%.
- Running cost depends on your electricity price divided by your gas price, set against the heat pump SCOP of around 3 to 4. On a standard tariff the two are close; a heat pump tariff tips it.
- The expensive parts are the cylinder, radiator upsizing and pipework, not the outdoor unit.
- A well insulated home needs a smaller unit and fewer radiator changes, so insulation lowers the heat pump price as well as the bills.
How much does an air source heat pump cost?
These are typical installed prices for a full system in London, Surrey, Kent and Hertfordshire: the outdoor unit, a hot water cylinder, radiator changes where needed, controls and commissioning. They are market ranges, not a Stay Warm quote. Your own price comes from a heat loss survey of your home.
| Home | Typical installed cost | After the £7,500 grant |
|---|---|---|
| 2 to 3 bed terrace, semi or flat with outdoor space | £8,000 to £15,000 | £500 to £7,500 |
| 4 bed or larger detached or semi | £12,000 to £20,000 | £4,500 to £12,500 |
| Any size, heated by oil or LPG with no mains gas (21 July 2026 to 31 March 2027) | As above | Grant rises to £9,000 |
The wide range inside each row is mostly about radiators and pipework. A 1990s house with a cavity wall, a loft top-up and decent sized radiators sits at the bottom. A solid wall Victorian house that needs eight radiators upsized, new pipe runs and a cylinder where there was only a combi sits at the top. See heat pumps in old houses for why.
What is in the price?
A proper heat pump quote is a whole heating system, not a box on the wall. It should list all of the following, priced, so you can compare two quotes line by line.
- Outdoor unit. Usually 5 to 12 kW for a house, sized from a room by room heat loss calculation, not a rule of thumb.
- Hot water cylinder. A heat pump cannot heat water on demand like a combi, so most homes need a cylinder of 150 to 250 litres, plus the space for it.
- Radiators. Heat pumps run at 35 to 55°C flow temperatures instead of 60 to 75°C, so some radiators need to be larger. Each change is a line on the quote.
- Pipework. New primary pipework to the unit and cylinder, and sometimes larger pipe to the radiators.
- Controls. A weather compensating controller and room sensors; these matter more than on a gas system.
- Commissioning and paperwork. MCS certificate, Building Regulations notification, handover and the grant application.
How the £7,500 grant comes off the price
The Boiler Upgrade Scheme covers England and Wales and pays £7,500 towards an air source or ground source heat pump that replaces fossil fuel or electric heating. It is funded through to 2029/30. You do not apply for it yourself. The MCS certified installer applies, deducts the grant from the quote, and you sign to confirm the installation. The old rule that you had to have loft and cavity insulation first was removed in 2024.
Scotland and Northern Ireland run their own schemes. Low income households in an EPC D to G home may also be able to get a heat pump through their council under the Warm Homes: Local Grant, where the council appoints the installer. The heat pump grants guide covers both routes.
What does a heat pump cost to run compared with gas?
A heat pump delivers around 3 to 4 kWh of heat for every 1 kWh of electricity over a year. That figure is the SCOP. A gas boiler delivers around 0.85 to 0.9 kWh of heat per kWh of gas. So the comparison comes down to one ratio: how much more you pay per kWh for electricity than for gas.
| Scenario (illustrative, check your own tariff) | Cost per kWh of heat | Result |
|---|---|---|
| Gas boiler, gas at 6p per kWh, 85% efficient | About 7p | The benchmark |
| Heat pump, SCOP 3.0, electricity at 25p | About 8.3p | Slightly dearer than gas |
| Heat pump, SCOP 3.5, electricity at 25p | About 7.1p | Level with gas |
| Heat pump, SCOP 4.0, electricity at 25p | About 6.3p | Cheaper than gas |
| Heat pump, SCOP 3.5, on a lower rate heat pump tariff | Below gas | Cheapest of the set |
Unit prices move every quarter, so treat the pence figures as an illustration and put your own tariff into the sum. The SCOP rises when the house is insulated and the radiators are sized for a low flow temperature, and several suppliers now offer heat pump tariffs with a lower unit rate. You also stop paying the gas standing charge if the meter is removed.
What pushes the price up?
- Radiator upsizing. The single biggest variable. A poorly insulated house may need most radiators changed; an insulated one may need two or three.
- No existing cylinder. Combi homes need a cylinder, a cupboard for it, and new pipework.
- Long pipe runs. A unit at the far end of a garden or a cylinder two floors from the unit adds pipe, insulation and labour.
- Microbore pipework. Narrow 8 or 10 mm pipe from the 1970s and 1980s may not carry enough flow and can need replacing.
- Planning. Most installs are permitted development in England, subject to the MCS 020 noise assessment. Listed buildings and some flats need consent.
- Heat loss. The more heat the house loses, the bigger the unit. Insulating first often takes the unit down a size and removes radiator changes, which is why we advise insulating before a heat pump.
How Stay Warm arranges a heat pump
Heat pumps are arranged and project-managed by Stay Warm and installed by accredited, MCS certified installers. Our part is the fabric. We start with a free heat loss survey and tell you what to insulate before the heat pump so the system is sized right and the running cost stacks up. Our own PAS 2030:2023 certified team installs the insulation, at 0% VAT, with a 10-year manufacturer warranty and 25-year insurance backed guarantee.
- Free heat loss survey and a written prioritised plan with indicative costs.
- Insulation and draught proofing by our own team.
- Heat pump design and fixed quote from the MCS installer, grant already deducted.
- Installation, usually two to five days, then commissioning and handover.
The air source heat pump service page explains the full process.
Frequently asked questions
How much does an air source heat pump cost for a 3 bed house?
Typically £8,000 to £15,000 installed before the grant, including a hot water cylinder and radiator changes. With the £7,500 Boiler Upgrade Scheme grant deducted, a net £500 to £7,500. Larger homes are £12,000 to £20,000 before the grant.
Is the £7,500 grant taken off the quote or paid to me?
It is taken off the quote. The MCS certified installer applies for the Boiler Upgrade Scheme on your behalf, shows the grant as a deduction, and you sign to confirm the installation. You never handle the money.
Do I pay VAT on a heat pump?
No. Air source and ground source heat pumps are energy-saving materials under HMRC VAT Notice 708/6, so installation is 0% VAT until 31 March 2027, after which the rate is due to become 5%.
Is a heat pump cheaper to run than a gas boiler?
It depends on the ratio of your electricity price to your gas price and on the SCOP the system achieves. At a SCOP of 3.5 and a standard tariff the two are roughly level. At a SCOP of 4, or on a heat pump tariff with a lower unit rate, the heat pump is cheaper. Our heat pump vs gas boiler guide works through the sums.
Do I need to insulate before getting a heat pump?
The grant no longer requires it, but a well insulated home needs a smaller unit, fewer radiator changes and less electricity. Loft top-up and draught proofing are cheap and quick; solid wall insulation is the big one on older houses. A free heat loss survey tells you which measures matter for your home.
Do I need a hot water cylinder?
Almost always. A heat pump heats water slowly at a lower temperature, so it stores it in a cylinder of around 150 to 250 litres. If you have a combi boiler now, the cylinder and its cupboard are part of the cost.