Heat pump grant rises to £7,500: what it means for your home

The Boiler Upgrade Scheme grant for heat pumps will rise to £7,500 from 23 October 2024, a £2,500 increase that the government says is built to accelerate the UK’s shift away from gas boilers. For a typical 3-bed semi, that cuts the upfront cost of an air-source heat pump from roughly £8,000–£11,000 to between £3,500 and £5,500 after the grant. That is the kind of number that makes a homeowner pause and do the maths.

As reported by Wales Online, the change applies to both air-source and ground-source heat pumps, though ground-source installations already attracted a higher grant of £6,000. The move follows months of industry lobbying warning that the previous £5,000 level was not enough to compete with the roughly £1,500–£2,500 cost of a new gas boiler.

Who qualifies, and who doesn’t

Eligibility for the increased grant is not automatic. The scheme, administered by Ofgem, requires that your property has a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation. If your EPC says you need top-up loft insulation or cavity wall fill, you must install those measures first, or at least have a registered installer confirm they are not feasible. That rule catches many homeowners off guard: about 40% of UK homes still have uninsulated cavity walls, according to the Energy Saving Trust.

The grant is also limited to one property per household and cannot be combined with other government heat pump subsidies, such as the Social Housing Decarbonisation Fund. Homeowners in Scotland, Wales, and England are all eligible, though the Welsh government has its own separate schemes that can be layered on top, worth checking if you live in a devolved region.

What it costs a typical 3-bed semi

Let’s put real numbers on this. A typical installation for a 3-bed semi with good insulation might run £9,000 including labour, the heat pump unit, and a new hot water cylinder. After the £7,500 grant, the homeowner pays £1,500. That is comparable to a new gas boiler, and the running costs are lower. Ofgem estimates a well-installed heat pump can cut heating bills by 20–30% compared to a gas boiler, assuming the current price cap of 24.5p per kWh for electricity and 6.0p per kWh for gas. The catch is that electricity is roughly four times the price of gas per unit, so the savings depend heavily on the heat pump’s efficiency (measured by its Coefficient of Performance, or CoP). A CoP of 3.5 means you get 3.5 kWh of heat for every 1 kWh of electricity, that is where the savings come from.

But the upfront cost is only part of the story. Many homes also need a new hot water cylinder (typically £800–£1,200) and possibly a larger radiator to run at lower flow temperatures. That can push the total to £12,000–£14,000 before the grant. The increase to £7,500 helps, but it does not eliminate the need for a heat-loss survey and, in older homes, fabric improvements.

EPC impact and resale value

Installing a heat pump can lift your EPC rating by one or two bands, depending on the property’s starting point. A D-rated home moving to a C rating gains an estimated £1,500–£3,000 in resale value, according to Nationwide’s 2023 analysis. For a C-rated home, the gain is smaller but still positive. The government’s own modelling suggests that every £1 spent on energy efficiency adds £2–£3 to property value, a ratio that improves with the higher grant.

Yet there is a timing issue. The grant is available until 31 March 2027, but the government has not confirmed funding beyond that date. Homeowners considering a heat pump should act before the scheme’s end, especially as the grant could be reduced or withdrawn under a future spending review.

What to do next

If you are thinking about a heat pump, start with an EPC check. You can find your current EPC on the gov.uk website using your postcode. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. Then find an MCS-certified installer (the Microgeneration Certification Scheme is mandatory for grant eligibility). Get three quotes, ask for a heat-loss calculation, and check the CoP guarantee. The grant increase makes the numbers work for many more homes, but only if the fabric is ready.