Heat pump vs new boiler in London: honest 2026 comparison
Air source heat pump or new gas boiler for your London home? Real costs, real performance, and what works for terraces, flats, and renovations, by London plumber Ilir Nuredini.
The boiler-or-heat-pump question is becoming the most common one I get from London homeowners. The honest answer is: depends on your house, your money, and how long you plan to stay. Here is what I tell people in their kitchen when they ask me, with no salesman incentive on either side.
The 30-second version
For most existing London homes (Victorian or Edwardian terrace, single or double glazing, standard small radiators), a like-for-like gas boiler replacement is still the more cost-effective choice in 2026. The £7,500 Boiler Upgrade Scheme grant for heat pumps is generous, but the install cost is still higher, the disruption is greater, and the running cost only beats gas if you have done significant insulation work.
For new builds, full renovations, or homes that have already been deeply insulated, a heat pump is a sensible long-term choice that should outlast a boiler.
For everything in between, here is the detail.
What a heat pump actually is
An air source heat pump is a unit that sits outside your house (usually in the back garden or on a wall). It looks similar to an air conditioning unit. It extracts heat from outside air and uses electricity to compress and concentrate it, delivering useful heat to your central heating system at lower water temperatures than a gas boiler.
Key technical points that matter:
- A heat pump runs your radiators at 35 to 55 degrees, not 60 to 75 like a gas boiler
- Lower flow temperature means existing small radiators may not give out enough heat unless the room is well insulated
- Heat pumps work best when the heating runs continuously at low temperature, not in short bursts
- They produce hot water but at lower temperatures than a boiler, requiring weekly Legionella cycles to safety standards
In practice this means a heat pump is not a like-for-like swap. The whole heating system needs reviewing.
Cost comparison for a typical 3-bed London terrace
| Item | Gas boiler swap | Air source heat pump install |
|---|---|---|
| Equipment | £1,400 to £2,500 | £6,000 to £9,000 |
| Install labour | £900 to £1,500 | £4,000 to £8,000 |
| Hot water cylinder (if needed) | £0 (combi) or £700 to £1,400 (system) | £1,200 to £2,500 (always needed) |
| Radiator upgrades (where needed) | £0 typically | £1,500 to £4,000 |
| Pipework upgrades | Minimal | £1,500 to £4,000 in some homes |
| Insulation work (recommended) | None | £2,000 to £8,000 if not already done |
| Outside unit installation | N/A | £400 to £900 |
| Subtotal before grant | £2,300 to £5,400 | £15,600 to £35,400 |
| Boiler Upgrade Scheme grant | N/A | -£7,500 |
| Net cost | £2,300 to £5,400 | £8,100 to £27,900 |
Boiler beats heat pump on cost in almost every scenario, even with the grant. The gap narrows as your house gets bigger and as you do more insulation work alongside the install.
Running costs
This is where it gets interesting. Running costs depend heavily on:
- Your insulation level
- Your usage patterns
- Electricity vs gas prices
- The Coefficient of Performance (COP) of the heat pump
A modern gas boiler runs at about 90 to 94 percent efficiency. So 1 kWh of gas gives you about 0.9 kWh of heat.
A heat pump has a COP of 3 to 4 in mild conditions (above 5 degrees). So 1 kWh of electricity gives you 3 to 4 kWh of heat. Below freezing, COP drops to 2 to 2.5.
At 2026 London prices (rough averages):
- Gas: about 8p per kWh
- Electricity: about 28p per kWh
For 1 kWh of useful heat:
- Gas boiler: 1/0.9 × 8p = 8.9p
- Heat pump (COP 3.5): 1/3.5 × 28p = 8p
- Heat pump (COP 2.5 in winter): 1/2.5 × 28p = 11.2p
Conclusion: heat pump is roughly cost-equivalent to gas in mild conditions, slightly more expensive in winter. The cost gap depends entirely on your COP, which depends on how cold it gets and how well your house holds heat.
When a heat pump makes sense
Honest list of where I would recommend it:
New builds and full renovations
You are stripping the house anyway. You can install large radiators or underfloor heating, insulate to current standards, route pipework cleanly. The marginal extra cost over a boiler install is small compared to total renovation budget.
Well-insulated houses (EPC C or above)
The heat demand is low enough that a heat pump can meet it with low flow temperatures and existing radiators. Running cost is competitive.
Long-term occupants
A heat pump should last 20 years. A boiler 12 to 15. If you plan to stay 15+ years, the longer life of the heat pump partly offsets the higher install cost.
Owners who want to be off gas
Some people want this for environmental reasons. Reasonable. Just go in with eyes open about cost.
Homes with good outdoor unit space
A semi-detached with a garden, side return, or flat roof works well. A flat with no outside space cannot install one.
When a heat pump does not make sense
Equally honest:
Older terraces with single glazing and small radiators
The heat pump would struggle to keep the house warm in February. The radiators would need replacing with much larger ones (some triple-panel, some doubled in surface area) which adds £2,000 to £5,000 to the job. Net result: spending £25,000 on a heat pump install that does not heat as well as the £3,500 boiler it replaced.
Flats in mansion blocks
Often no permission for an outside unit. Communal heating systems may rule it out anyway.
Listed buildings
Outside unit may not get planning permission. Conservation areas often a problem.
Short-term occupants
If you are planning to move in 5 to 10 years, the heat pump payback never arrives. A new boiler is the more sensible investment.
Households with low gas costs
If your annual heating bill is under £600 (small flat, low usage), the energy savings from a heat pump cannot recover the install cost in any sensible timeframe.
What about hybrid systems?
A hybrid system runs both a boiler and a heat pump. The heat pump handles most of the year (mild conditions where it is efficient), the boiler kicks in for the coldest weeks when heat pump efficiency drops.
Pros: best running cost in any weather. Avoids the need to oversize the heat pump for the coldest week of the year.
Cons: install cost is higher (you are buying both). Complexity is higher. Service and repair cost is higher (two systems to maintain). The Boiler Upgrade Scheme grant does not apply to hybrid installs.
For most London homes, a hybrid is interesting but the maths rarely beats a straight boiler swap unless you also want to be partly off gas.
The Boiler Upgrade Scheme
To be clear about what is actually on offer in 2026:
- £7,500 grant towards an air source heat pump install
- £7,500 grant towards a ground source heat pump install
- Eligible properties: most owner-occupied homes in England and Wales with an EPC and no outstanding recommendations for loft or cavity wall insulation
- Application is done by the installer, not the homeowner directly
- The installer must be MCS-certified
- The grant is paid as a deduction from the installer's quote (you do not see the cash, you see a smaller bill)
Some London councils also offer additional top-up schemes (Lambeth, Camden, Hackney have run pilots). Worth checking your borough's energy advice page before committing.
Insulation first, always
The single biggest mistake I see is people installing a heat pump in a poorly-insulated house. The pump cannot keep up, the house feels cold, the bills are high, and they blame the technology. The technology was never the problem.
Order of operations for any sensible heating upgrade in an older London home:
- Loft insulation to current standard (270mm minimum). Often free or subsidised through the Great British Insulation Scheme. Saves more energy per pound spent than any heating change.
- Double or triple glazing if budget allows. Major change, big cost, big benefit.
- Cavity wall insulation if you have suitable cavities. Many London Victorian terraces have solid walls and cannot do this.
- Solid wall insulation (internal or external) if you have solid walls. Significant cost and disruption.
- Floor insulation if you have ground-floor void access.
- Then consider heating system upgrade, with the new building load in mind.
A heat pump in a properly insulated London home runs efficiently and cheaply. A heat pump in a draughty Victorian terrace with single-pane sash windows is fighting a losing battle.
What I recommend per property type
Modern flat or new build: heat pump if outside space allows and current heating is electric (where heat pump is dramatically cheaper to run than electric panel heaters). Otherwise stick with combi.
Victorian or Edwardian terrace, no major insulation upgrades planned: stay with gas. Replace existing boiler when it fails, choose a high-efficiency model, run for another 12 to 15 years.
Same terrace, full renovation in progress: serious heat pump consideration. You can integrate large radiators or underfloor heating during the build.
Mansion block flat: combi or system boiler. Heat pump rarely viable.
Larger detached or semi-detached: depends on insulation level and budget. Worth getting a proper survey from an MCS installer.
How I help
I am a Gas Safe registered plumber, not an MCS heat pump installer (MCS is a separate certification specifically for renewable installs). For heat pumps I will recommend MCS-certified installers I trust in London and not try to sell you something I am not the right person to fit.
For boilers I do my own surveys, quotes, and installs across all 15 London boroughs. If you are weighing up the choice and want an honest second opinion before committing to either, send a WhatsApp with your property type, current setup, and what you want to achieve. I will tell you straight whether a heat pump install or a boiler replacement is the better call for your specific situation.