Heat pumps have moved from a niche choice to a mainstream one, but the numbers you'll see quoted online vary wildly. Here's what a heat pump actually costs installed, what it costs to run against a gas boiler, and how the government grant changes the maths.
A fully installed air source heat pump typically runs £8,000–£15,000 before any grant, depending on your home's size and how much pipework or radiator work is needed. The Boiler Upgrade Scheme (BUS) grant takes £7,500 straight off that price — your installer applies for it and deducts it from the quote, so you never handle the paperwork yourself. Net cost after the grant is typically:
That's broadly comparable to the £3,700 average cost of a new gas boiler — the grant is what makes a heat pump price-competitive at the point of installation, even before running costs come into it.
This is the question people most want a straight answer to, and the honest one is: it depends on your tariff. At the standard electricity price, a well-installed heat pump costs somewhere close to a gas boiler to run — in some worked examples slightly less, in others slightly more, typically within about £150/year either way. Where it becomes clearly cheaper is on a heat-pump-specific electricity tariff (several suppliers now offer these) — those can bring running costs down to noticeably below gas, sometimes by close to a fifth. Comparing heat-pump-specific tariffs before you commit is worth the ten minutes.
The single biggest factor isn't the heat pump itself — it's your home's insulation and your radiators. Heat pumps work most efficiently heating water to lower temperatures than a gas boiler does, so a poorly insulated home with small, old radiators will get a worse result than a well-insulated one with radiators sized for the job. If you haven't topped up your loft insulation, it's worth doing that first — the insulation guide covers why it's the fastest payback on this whole site.
Air source heat pumps (the outdoor unit you'll usually see against a wall or in a garden) are by far the more common choice in London — cheaper to install and workable on most plots. Ground source heat pumps cost more upfront because they need trenches or a borehole, but can run more efficiently. In practice, garden space is the deciding factor for most London homes, and it usually rules ground source out for anything but larger detached properties.
The scheme has been extended to 2030, so there's no immediate rush — and a rule that used to trip people up has gone: as of the scheme's April 2026 update, you no longer need to show your EPC has no outstanding insulation recommendations to qualify.
Grant terms have changed more than once in the scheme's history and could change again — worth confirming current figures with your installer when you're ready to get quotes rather than relying on older figures, including this page's.
Figures above are 2026 UK averages drawn from published installer and energy-industry data; your actual quote depends on your specific property, insulation and chosen tariff. If you're in a conservation area, also check your borough's planning rules before committing.