Air source heat pump costs are genuinely confusing, and not by accident. The figures quoted publicly range from £6,000 to £25,000 for what sounds like the same thing, the grant changes the arithmetic entirely, and the running cost depends on variables — insulation, flow temperature, how you use the system — that nobody can assess from your postcode.
What follows is our attempt at a straight answer for London specifically. Real installed prices, a clear explanation of the Boiler Upgrade Scheme, a worked running-cost comparison against gas, and an honest account of the situations where a heat pump is the wrong purchase. If you read nothing else, read the section on insulation — it decides more of the outcome than the equipment does.
What an air source heat pump costs in London
| System | Typically suits | Installed price |
|---|---|---|
| 5kW air-to-water | One or two bedroom flat, or a small well-insulated house | £8,000 – £11,000 |
| 8kW air-to-water | Typical three-bedroom London terrace or semi | £10,000 – £14,000 |
| 12kW air-to-water | Four-bedroom family home, or a larger period property | £13,000 – £17,000 |
| 16kW+ air-to-water | Large or poorly insulated property, high heat demand | £16,000 – £22,000 |
| Air-to-air, single room | Heats and cools one room — no grant available | £1,800 – £3,000 |
| Air-to-air, three to four rooms | Multi-split system across a flat or terrace — no grant available | £4,800 – £8,000 |
The most important thing to notice is that there is no single air source heat pump cost — the last two rows describe a completely different product to the four above them. Air-to-water systems — the kind that feed radiators and a hot water cylinder — are what most people mean by "heat pump", and they are what the government grant supports. Air-to-air systems deliver heat straight into rooms, cost a fraction as much, cool in summer as well, and attract no grant at all. For a substantial share of London flats, the second option is the more sensible purchase even though it looks less impressive on paper.
Equipment choice moves these figures less than people expect. Daikin, Mitsubishi Electric, Panasonic and LG all publish full technical specifications — Daikin's data for its domestic range is a reasonable place to start comparing — but capacity and installation complexity drive the price far more than the badge.
The costs that sit alongside the heat pump
The heat pump is rarely the whole invoice. These are the items that appear on a genuine quote and are quietly missing from an unrealistically cheap one.
| Item | When it applies | Typical cost |
|---|---|---|
| Hot water cylinder | Required by most air-to-water systems; often replaces the old one | £800 – £1,800 |
| Radiator upgrades | Larger emitters for lower flow temperatures, per radiator | £150 – £400 |
| Electrical work | Dedicated circuit and any consumer unit upgrade | £300 – £900 |
| Loft or cavity insulation | Often required before a grant application can proceed | £400 – £2,500 |
| Outdoor unit base or brackets | Concrete plinth, wall mounts and anti-vibration fixings | £200 – £600 |
| Annual service | Keeps the manufacturer warranty valid, per year | £120 – £200 |
Radiator upgrades deserve a note. Heat pumps run best at lower flow temperatures than gas boilers, which means existing radiators sometimes need to be larger to deliver the same warmth. A quote that includes no allowance for this in an older London property has either surveyed unusually well or has not surveyed at all.
Want to know which of these apply to your property before you commit to anything?
Ask us about your propertyThe Boiler Upgrade Scheme, explained plainly
The Boiler Upgrade Scheme is the main government grant for low-carbon heating in England and Wales. For an air source heat pump, it is worth £7,500, and the mechanism is simpler than people assume: your installer applies on your behalf, the grant is paid to them, and it is deducted from your quote. You never receive or handle the money, and there is nothing to reclaim afterwards.
Who qualifies
- You own the property — homeowners, landlords and most small non-domestic properties in England and Wales.
- You have a valid EPC with no outstanding recommendations for loft or cavity wall insulation. This is the condition that catches the most London applicants, and it is usually fixable.
- You are replacing a fossil fuel system — gas, oil, LPG or electric — rather than an existing heat pump.
- The installation is carried out by an MCS certified installer, and the system capacity is within the scheme's limits.
New-build properties are generally excluded, as are social housing in most circumstances. Because the conditions and the grant value have both changed since the scheme launched, Ofgem's property owner guidance is the only source worth relying on — summaries elsewhere, including this one, go out of date.
Being straight with you: Kelvara is not currently MCS certified. The grant can only be claimed through an MCS certified installer, so we cannot apply for it on your behalf at present. If the £7,500 is central to your plans, you will need an MCS certified company for that part of the work. We would rather say so on this page than let you find out at quotation stage — and we are still happy to talk through whether the technology suits your property at all, which is the more important question and the one people usually skip.
What it costs to run: a worked example
Take a reasonably insulated three-bedroom London terrace with an annual heat demand of around 12,000 kWh — a fair average for that kind of property.
With a gas boiler
At roughly 85% seasonal efficiency, meeting that demand needs about 14,100 kWh of gas. At around 6.5p per kWh, that is approximately £920 a year, plus the standing charge on the gas connection.
With an air source heat pump
A well-designed system achieving a seasonal efficiency of 3.4 needs around 3,530 kWh of electricity for the same heat. At around 26p per kWh, that is approximately £920 a year — and the gas standing charge disappears if you remove the gas supply entirely.
What that actually tells you
Broadly a wash on running cost at current prices, and a very substantial reduction in carbon. Now change one variable. If the system only manages a seasonal efficiency of 2.5 — which is what happens when a heat pump is undersized, or installed into a poorly insulated house and forced to run at high flow temperatures — the same heat demand needs 4,800 kWh of electricity, or about £1,250 a year. That is meaningfully worse than the boiler.
The difference between those two outcomes is not the brand of heat pump. It is the heat loss survey, the sizing, the emitters and the insulation. Which is exactly why we survey properties room by room rather than quoting from floor area, and why we will sometimes tell you to spend two thousand pounds on insulation before spending twelve thousand on a heat pump.
When a heat pump is the wrong purchase
An honest cost guide has to include this section. There are London properties where we would not recommend an air source heat pump at all:
- Poorly insulated solid-wall properties where the insulation work is not affordable or not permitted. The heat pump will run badly and cost more than the boiler it replaced.
- Flats with no viable outdoor position — no balcony, no consent, or nowhere the unit can sit without noise affecting a neighbour.
- Properties you plan to sell within two or three years. The payback period does not work, and the market premium for a heat pump is not yet reliable enough to count on.
- Homes where the real problem is summer overheating. A top-floor London flat that is unbearable in July needs cooling, and an air conditioning system delivers that for a fraction of the cost while still heating efficiently in shoulder season.
How to compare heat pump quotes
If you collect three quotes, ask each for the same five things in writing. The comparison usually resolves itself.
- The room-by-room heat loss calculation. Not a total — the working. If they cannot produce one, they have sized by guesswork.
- The design flow temperature. Lower is better for efficiency; a quote designed around 55°C flow will cost noticeably more to run than one designed around 45°C.
- Which radiators are being changed, and whether that is inside the price or a provisional sum.
- The predicted seasonal efficiency, and the assumptions behind it.
- Their MCS certification number, if the Boiler Upgrade Scheme grant is part of the plan. Without it, there is no grant.
Questions
Frequently asked questions
How much is an air source heat pump in London after the grant?
Take the installed price and subtract £7,500. A typical three-bedroom London terrace needing an 8kW system at £10,000 to £14,000 lands at roughly £2,500 to £6,500 after the Boiler Upgrade Scheme grant is applied — genuinely comparable to a high-specification gas boiler replacement. The grant is paid to the installer and deducted from your quote, so you never handle the money.
Who is eligible for the £7,500 Boiler Upgrade Scheme grant?
In broad terms: you own the property, it's in England or Wales, you have a valid EPC with no outstanding recommendations for loft or cavity wall insulation, and you're replacing a fossil fuel system such as a gas, oil or LPG boiler rather than an existing heat pump. New-build properties are generally excluded. Ofgem publishes the current conditions in full, and they do change, so check the live guidance rather than a summary.
Why are heat pumps more expensive in London?
Three reasons that compound. Access is harder — terraced streets, restricted parking and awkward outdoor positions all add labour. The housing stock is older and less insulated, so systems need to be larger and more remedial work is needed first. And leasehold flats add a consent process that houses elsewhere simply don't have. The equipment costs the same as anywhere; the installation around it doesn't.
Will a heat pump actually save me money on my bills?
Sometimes, and honestly not always. A well-designed system in a reasonably insulated home usually lands close to gas on annual running cost and well below it on carbon. In a poorly insulated property, or where the system was undersized and has to run at high flow temperatures, it can cost more than the boiler it replaced. The insulation and the design decide this, not the brand — which is why any installer promising guaranteed savings without a heat loss survey should be treated carefully.
How long does a heat pump last?
Fifteen to twenty years for the heat pump itself with proper annual maintenance, against ten to fifteen for a typical gas boiler. The hot water cylinder generally lasts longer still. Servicing is not optional if you want that lifespan or a valid warranty — it's a manufacturer condition, and the refrigerant circuit has to be checked by a qualified engineer.
Do I need planning permission for a heat pump in London?
Usually not for a house, as most domestic outdoor units fall within permitted development if they meet the conditions on size, siting and noise at the boundary. Listed buildings, conservation areas and flats are the routine exceptions, and leaseholders will typically need freeholder consent regardless of the planning position. This is worth establishing before ordering equipment, not after.
Is a heat pump worth it in a London flat?
For a flat, an air-to-water heat pump is often impractical — there's rarely a good outdoor position, a cylinder needs space you may not have, and the freeholder has to agree. An air-to-air system is frequently the better fit: much cheaper, far less disruptive, heats efficiently through spring and autumn and cools in summer. It doesn't attract the grant, but the total cost is a fraction of the alternative.
What's the difference between air source and ground source?
Ground source heat pumps draw heat from buried pipework rather than the air. They're modestly more efficient and more stable in deep winter, but they need substantial outdoor space for boreholes or trenches, and installed costs typically start around double. For essentially every London property, air source is the realistic option.