65,000 heat pumps were installed in UK homes last year, a record, and 40% more than in 2024. The figure comes from industry data compiled by the Heat Pump Association and reported by BusinessGreen. But 65,000 is still a fraction of the 1.5 million gas boilers sold annually. The gap is the story.
What the record tells us about policy
The rise is not accidental. In 2023 the government raised the Boiler Upgrade Scheme grant from £5,000 to £7,500. That single change doubled application volumes within six months. Ofgem data shows 32,000 grants were issued in 2025, up from 22,000 the year before. The £7,500 now covers roughly half the typical installation cost of a heat pump, which ranges from £7,000 to £13,000 depending on property size and whether radiators or underfloor heating need upgrading. The catch is that many households still face a net cost of £3,000–£5,000 even after the grant. For a family on a median income, that is a significant outlay.
Who qualifies, and who doesn’t
The Boiler Upgrade Scheme is open to homeowners and self-builders in England and Wales. Landlords are excluded, which slows take-up in the private rented sector where EPC C requirements loom. Applicants must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation, a sensible rule, but one that blocks many older homes. Energy Saving Trust estimates that 8 million UK homes lack adequate loft insulation. A heat pump in a draughty Victorian terrace will cost more to run than a modern gas boiler. The grant is built to reward fabric-first thinking, but the upfront cost of insulation can add £2,000–£4,000 to the project.
What it costs a typical 3-bed semi, and what you save
Assume a 3-bed semi with 12,000 kWh annual heat demand. A modern gas boiler at 90% efficiency burns about 13,300 kWh of gas, costing roughly £930 at current price cap rates (24.5p/kWh electricity, 6.5p/kWh gas). An air-source heat pump with a Seasonal Coefficient of Performance (SCOP) of 3.5 uses 3,430 kWh of electricity, about £840 at standard rates. That is a saving of £90 a year. But pair the heat pump with a smart tariff like Octopus Cosy or EDF’s GoElectric, which offer off-peak rates of 10–15p/kWh, and the running cost drops to £510–£600, a saving of £330–£420 a year versus gas. The £7,500 grant then pays back in 10–15 years, not 30. The key variable is the tariff. Most households on standard variable tariffs will not see the headline savings. Switching to a time-of-use tariff is essential.
EPC impact and resale value
Installing a heat pump typically lifts an EPC rating by one band, say from D (55–68) to C (69–80). That improvement can increase a property’s value by 2–5%, according to Nationwide’s 2024 analysis of green home features. More importantly, it future-proofs against the 2035 gas boiler ban for new builds and the likely extension of minimum EPC standards to existing homes. The government’s Clean Heat Market Mechanism, which fines boiler manufacturers who miss heat pump sales targets, is already pushing installers to train up. The number of certified heat pump installers rose 30% in 2025, to 8,000. That is still only one per 8,000 homes, but the direction is clear.
What you should do now
If your gas boiler is over 12 years old, start planning. Get an EPC assessment to identify insulation gaps. Apply for the Boiler Upgrade Scheme through Ofgem’s portal, the £7,500 grant is available until March 2028 or until funds run out. Then compare heat pump quotes from at least three MCS-certified installers. And switch to a time-of-use electricity tariff before commissioning the install. The record numbers show the market is moving. The question is whether your home will be part of the next record, or left paying higher bills on an ageing boiler.
Frequently Asked Questions
After the Boiler Upgrade Scheme grant, a typical air-source heat pump installation costs between £3,000 and £5,500 for a 3-bed semi. This includes the unit, labour, and any necessary radiator or pipework upgrades. Costs vary by region and property type.
It depends on your electricity tariff and insulation. On a standard variable tariff, savings are modest, around £90 a year. On a smart time-of-use tariff (e.g., Octopus Cosy), savings can reach £330–£420 annually. Proper insulation is essential to avoid higher running costs.
