Boiler Upgrade Scheme (BUS): Complete Guide for Landlords
How landlords can access substantial heat pump grants to improve EPC ratings and reduce tenant bills
Air source heat pump professionally installed outside a British semi-detached home
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The Boiler Upgrade Scheme (BUS) offers landlords up to £7,500 towards the cost of installing a heat pump. With the scheme now extended to 2030, this is one of the most valuable grants available for improving your property's EPC rating while future-proofing against the phase-out of gas boilers.
Heat pumps typically improve EPC ratings by 10-20 points, often enough to move a property from D or E to C in a single installation. Combined with the BUS grant, the net cost can be comparable to a new gas boiler while delivering significantly better energy performance.
Grant Amounts
The BUS provides upfront capital grants that are deducted from the total installation cost. The grant is paid directly to the MCS-certified installer, so you only pay the remaining balance.
BUS Grant Amounts by Technology
| Improvement | Low Estimate | High Estimate |
|---|---|---|
| Air source heat pump (ASHP)Most common option for rental properties. Typical total cost £10,000-£15,000. | £7,500 | £7,500 |
| Ground source heat pump (GSHP)Requires garden space for ground loops. Total cost £18,000-£35,000. | £7,500 | £7,500 |
| Biomass boilerRural properties only. Requires fuel storage. Total cost £10,000-£20,000. | £5,000 | £5,000 |
| Water source heat pumpRare. Requires water source (river, lake, borehole). | £7,500 | £7,500 |
Grant amounts are fixed. You pay total installation cost minus the grant.
Extended to 2030
The government has extended the Boiler Upgrade Scheme to March 2030, originally set to end in 2025. This extension gives landlords more time to plan and budget for heat pump installations, aligning perfectly with the 2030 EPC C deadline.
Why the Extension Matters for Landlords
- Time to plan: No rush to install before an arbitrary deadline
- Coordinate with EPC deadline: Install heat pump as part of 2030 compliance strategy
- Improving technology: Heat pumps are getting better and cheaper each year
- More installers: Growing installer base means more competition and better service
Landlord Eligibility
Private landlords are fully eligible for the Boiler Upgrade Scheme. There are no income tests, no requirements based on tenant circumstances, and no restriction on the number of properties you can claim for.
Eligibility Requirements
- Own the property (or have authority to approve works)
- Property must have a valid EPC (any rating)
- Must be replacing a fossil fuel heating system
- Property in England or Wales
- Use an MCS-certified installer
Not Eligible If
- Property already has a heat pump
- New build property (under 2 years old)
- Property does not have a valid EPC
- Installing DIY or using non-MCS installer
- Property in Scotland (separate scheme)
Property Requirements
Your property must meet certain technical requirements to qualify for the BUS and to ensure the heat pump operates effectively.
Valid EPC Certificate
The property must have a valid EPC certificate (issued within the last 10 years). If you do not have one, you will need to commission an EPC assessment before applying. Any EPC rating qualifies.
Replacing Fossil Fuel System
The heat pump must replace an existing fossil fuel heating system (gas, oil, LPG, or coal). Properties with existing electric heating may not qualify unless they have a fossil fuel backup system.
Adequate Insulation
While not a strict BUS requirement, heat pumps work best in well-insulated properties. Most installers will recommend addressing major insulation deficiencies before or alongside the heat pump installation.
Space for Heat Pump
Air source heat pumps require outdoor space (typically 1m x 1m ground footprint). Ground source heat pumps need garden space for ground loops or boreholes. Permitted development rights usually apply, but check conservation area restrictions.
Heat Pumps in Older Properties
One of the most common concerns landlords have is whether heat pumps will work effectively in older, less insulated properties. The good news is that modern heat pumps can work well in most UK housing stock with proper design and sizing.
Making Heat Pumps Work in Older Properties
- Correct sizing: Heat pumps must be sized for the property's heat loss, not just replacing the boiler kW rating. Larger radiators or underfloor heating may be needed.
- Insulation first: Addressing loft, cavity, or even partial solid wall insulation before installation reduces the required heat pump size and improves efficiency.
- High-temperature heat pumps: Newer models can deliver higher temperatures (65-70C) suitable for existing radiator systems, reducing the need for radiator upgrades.
- Hybrid systems: Heat pump combined with existing boiler as backup can be effective in hard-to-heat properties, though grant eligibility varies.
Installation Process
The BUS grant is applied for by the MCS-certified installer, not by you directly. This simplifies the process but means you must choose your installer carefully.
Step-by-Step Process
- 1Get quotes from MCS installers
Find MCS-certified heat pump installers in your area. Get at least 3 quotes.
- 2Property survey and system design
Installer assesses property, calculates heat loss, and designs appropriate system.
- 3Accept quote showing BUS discount
Quote should clearly show the £7,500 grant deducted from total price.
- 4Installer applies for BUS voucher
Once you accept the quote, installer applies to Ofgem for the grant voucher.
- 5Voucher issued (within 3 months)
Ofgem issues voucher. Work must be completed within 3 months of voucher issue.
- 6Installation completed
Installer completes work and registers installation with MCS.
- 7You pay balance
Pay installer the total cost minus the £7,500 grant.
- 8Installer receives grant
Ofgem pays the £7,500 directly to the installer.
Running Costs Comparison
One concern landlords have about heat pumps is running costs. While electricity is more expensive per kWh than gas, heat pumps are 3-4 times more efficient, meaning they use less energy overall.
| System | Efficiency | Fuel Cost/kWh | Annual Cost* |
|---|---|---|---|
| Gas boiler (old) | 75-80% | 7p | £1,100-£1,300 |
| Gas boiler (new A-rated) | 90-94% | 7p | £900-£1,100 |
| Air source heat pump | 280-350% | 22p | £700-£900 |
| Ground source heat pump | 350-450% | 22p | £550-£750 |
*Estimated annual heating cost for a typical 3-bed semi-detached house (12,000 kWh demand). Actual costs depend on insulation level, tariff, and usage patterns.
When a Heat Pump Makes Sense for Landlords
Heat pumps are not the right choice for every property or every landlord situation. Here is when to consider them and when to look at alternatives.
Good Candidates for Heat Pumps
- Property needs significant EPC improvement
- Current boiler is old or approaching end of life
- Property has or will have good insulation
- Outdoor space available for unit
- Long-term ownership planned
- Tenant is engaged and will use system correctly
- Property is off-gas (oil/LPG) - running cost savings are larger
Consider Alternatives When
- Current boiler is efficient and relatively new
- Property is poorly insulated with no plans to improve
- No space for outdoor unit
- Planning to sell property soon
- Property already at or near EPC C
- Flat with no access to outdoor space
- Conservation area/listed building restrictions
Your Next Steps
- 1
Check your current EPC
You need a valid EPC to apply. If yours is expired, get a new one.
- 2
Get quotes from MCS installers
Use the MCS installer finder to get at least 3 quotes. Compare not just price but system design.
- 3
Consider insulation first
Check if ECO4 can fund insulation improvements to make the heat pump more effective.
- 4
Accept quote and installer applies for voucher
Once you choose an installer, they handle the BUS application process.