Air Source Heat Pumps in London: What They Are, What They Cost, and What to Expect

**How ASHPs work**:

An air source heat pump works like a refrigerator in reverse — it extracts heat energy from the outside air (even at temperatures as low as -15°C) and transfers it into the home via a refrigerant cycle. The outdoor unit contains a fan, an evaporator coil, and a compressor; the indoor unit contains a condenser and the controls. The outdoor unit draws in air, the refrigerant evaporates and absorbs heat from the air, the compressor increases the temperature of the refrigerant vapour, and the condenser transfers the heat to the heating circuit (radiators or underfloor heating) inside the home.

The efficiency is expressed as the Coefficient of Performance (CoP) or Seasonal Coefficient of Performance (SCoP): a CoP of 3.0 means the heat pump produces 3 kWh of heat for every 1 kWh of electricity consumed. Modern ASHPs achieve SCoPs of 2.5–3.5 in UK conditions.

**Why ASHPs are different from gas boilers**:

A gas boiler heats water to 60–80°C and circulates it through radiators. An ASHP is most efficient at lower flow temperatures — typically 35–45°C for UFH (underfloor heating) and 45–55°C for low-temperature radiators. At higher flow temperatures, the ASHP's efficiency falls significantly (the CoP drops as the temperature difference between the outdoor air and the heating circuit increases).

• This means ASHPs are most efficiently integrated with:
• •*Underfloor heating* (which operates at 35–45°C flow temperature — ideal for ASHPs)
• •*Low-temperature radiators* (oversized radiators — typically 25–30% larger than a standard replacement like-for-like — that can deliver adequate heat output at 50–55°C rather than the 70–80°C of a gas boiler system)

Retrofitting an ASHP into an existing home with standard small radiators is possible but requires either replacing the radiators with larger ones or accepting a lower efficiency (and higher running cost). For new extensions with UFH, an ASHP is the natural heating system to specify.

**Is your property suitable?**

An ASHP is suitable for virtually any property that meets the following criteria:

• •*Adequate insulation*: The heat pump must be able to meet the heating demand of the property at the relatively low flow temperatures it operates at most efficiently. A poorly insulated solid-wall Victorian terrace with a heat loss of 15+ kW is not ideally suited to an ASHP without a fabric-first insulation upgrade (IWI/EWI, loft insulation). A well-insulated modern or retrofitted property with a heat loss of 4–8 kW is ideal.
• •*Outside space for the unit*: The outdoor unit is typically 800mm × 300mm × 700mm (width × depth × height) and requires: clear air circulation on the inlet and outlet faces (minimum 300mm clearance from walls); a hard-standing or wall-mounted bracket; a minimum 1m setback from the property boundary under Permitted Development conditions
• •*Planning/PD compliance*: ASHPs are Permitted Development under Class G, Part 14 if: the unit is in the rear or side garden (not on a roof facing the principal elevation or the highway); the total swept volume of the unit does not exceed 0.6m³; no more than one unit installed per property; installed by an MCS-certified installer
• •*Hot water cylinder*: An ASHP-compatible hot water cylinder (typically 200–300 litre unvented cylinder) is required to replace the combination boiler (which has no cylinder). This takes significant space — a 200 litre unvented cylinder is approximately 1.0m tall × 0.55m diameter.

• **Properties less suited to ASHPs (at least without upgrades)**:
• •Solid-wall Victorian and Edwardian terraces without insulation (high heat loss; heat pump must be oversized and run at high flow temperatures to meet demand — reducing efficiency)
• •Properties with combination boilers and no space for a hot water cylinder
• •Properties in Conservation Areas where the outdoor unit would be visible from the public highway (may require planning permission)
• •Properties with very small gardens or no outside space for the unit

**The Boiler Upgrade Scheme (BUS)**:

The Boiler Upgrade Scheme (BUS) provides a £7,500 grant for the installation of a new air source heat pump (or £6,000 for a ground source heat pump, or £7,500 for a biomass boiler where eligible) in domestic properties in England and Wales.

• *Key conditions for the BUS grant*:
• •The property must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation (if the EPC recommends these insulation measures and they have not been done, the property must have the insulation installed or obtain a 'rural exemption' before applying)
• •The installation must be by an MCS-certified installer (the MCS — Microgeneration Certification Scheme — is the quality assurance scheme for renewable energy installations in the UK)
• •The existing heating system must be fossil fuel (gas, oil, or LPG) — not electric storage heaters
• •Each property is eligible for one BUS grant
• •The grant is applied directly by the installer to reduce the invoice — the homeowner pays the net cost after the grant

*How to apply*: The MCS-certified installer applies for the BUS grant on behalf of the homeowner — the homeowner does not apply directly. The grant is administered by Ofgem.

**Typical ASHP installation costs for a London home (2025)**:

| Property type and system | Total cost before grant | Total cost after £7,500 grant | |---|---|---| | 2-bed mid-terrace, insulated, new UFH to extension, new cylinder | £10,000–£15,000 | £2,500–£7,500 | | 3-bed semi, part insulated, upgrade radiators + new cylinder | £12,000–£18,000 | £4,500–£10,500 | | 3-bed Victorian terrace, solid wall, new cylinder, no radiator change | £10,000–£14,000 | £2,500–£6,500 | | 4–5 bed detached, full system design, new cylinder, upgraded emitters | £16,000–£25,000 | £8,500–£17,500 |

*Note*: If radiator upgrades are required (to operate at lower flow temperatures), add £200–£600 per radiator replaced. If a new UFH system is being integrated into an extension (which is the most efficient ASHP configuration), the UFH cost is part of the extension project (see extension ground floor heating guide).

**What the installation involves**:

1. *Site survey*: The MCS-certified installer surveys the property, measures the heat loss of each room, and sizes the heat pump unit (kW output) against the calculated peak heat demand 2. *System design*: Flow temperatures, emitter (radiator/UFH) sizing, cylinder sizing, controls configuration 3. *Installation*: Outdoor unit on a hard-standing or bracket; indoor unit/flow centre in the plant room or utility cupboard; pipework connections to existing heating circuit or new emitters; new unvented hot water cylinder; new controls (smart thermostat, ASHP controller) 4. *Commissioning*: The system is commissioned and the installer carries out a MCS compliance check; handover documentation is issued 5. *MCS registration*: The installation is registered with MCS — this triggers the BUS grant payment and may be required for building insurance, EPC update, and smart export tariffs for any linked PV system

**Running cost comparison**:

At October 2025 energy prices (gas: approximately 4.5p/kWh; electricity: approximately 24p/kWh):

• •A gas boiler with a CoP of approximately 0.85 heats at an effective cost of 5.3p/kWh of heat
• •An ASHP with a SCoP of 3.0 heats at an effective cost of 8.0p/kWh of heat (24p ÷ 3.0)
• •An ASHP with a SCoP of 2.5 heats at an effective cost of 9.6p/kWh of heat

At current electricity-to-gas price ratios, an ASHP is NOT cheaper to run than a gas boiler for most properties — it is lower-carbon and eligible for the grant, but not lower-cost at the current gas:electricity price ratio. The economics improve as electricity prices fall relative to gas (the government's REMA review is looking at electricity pricing reform to address this), or when time-of-use electricity tariffs (such as Octopus Agile) are used to charge a hot water buffer cylinder during cheap-rate periods.

**The ideal integration point is a renovation or extension project**:

• The most cost-effective time to install an ASHP is during a renovation or extension project, because:
• •*The heating circuit is already open*: When the heating system is being reconfigured for a kitchen extension (new radiators in the extension, re-routing of heating pipes), the cost of sizing for an ASHP rather than a replacement boiler is marginal
• •*UFH is being installed in the extension anyway*: If UFH is specified for the extension floor (as it typically is for a new screed floor), the ASHP is the natural heating source — it avoids the need for additional radiators in the extension
• •*The hot water cylinder can be planned in*: A utility room in a new extension is the perfect location for an unvented cylinder — without a renovation, finding space for a 200-litre cylinder in an existing London terrace can be challenging
• •*Insulation upgrades are happening concurrently*: If the walls and roof are being insulated as part of the renovation (EWI/IWI, loft insulation), the fabric-first improvement happens at the same time as the heating system upgrade — reducing the peak heat demand to the point where a smaller, more efficient heat pump can meet the load

**Low-carbon heating specification for a new extension**:

• For a new kitchen-dining extension to a London Victorian terrace (30m², rear extension), the ideal low-carbon heating specification:
• •100mm PIR insulation to the extension floor (Part L U-value compliance 0.13 W/m²K)
• •200mm PIR warm flat roof (Part L U-value 0.13 W/m²K or better)
• •Cavity wall with 75–100mm cavity fill insulation
• •UFH pipe in anhydrite screed (35–45°C flow temperature — ideal for ASHP)
• •8–10 kW ASHP (sized to meet the whole-house heat demand including the extension)
• •250 litre unvented cylinder in the new utility room
• •Smart thermostat with ASHP-compatible controller

**The future — heat pumps and planning policy**:

The UK government's Future Homes Standard (anticipated to come into force around 2025–2026) requires all new homes to be built to very low-carbon standards, with heat pumps as the expected primary heating technology. For extensions and significant renovations, Part L already requires energy performance standards that favour low-temperature heating systems. The long-term direction of travel is clear: heat pumps will become the standard heating technology for London homes over the next 10–15 years.