The Boiler Upgrade Scheme (BUS) is the most immediately relevant grant for landlords considering heat pumps in 2026. It provides £7,500 for an air source heat pump (ASHP) or ground source heat pump (GSHP) — and crucially, landlords as well as owner-occupiers are eligible applicants, provided the property has a valid EPC with no outstanding recommendations for loft or cavity wall insulation. The BUS grant reduces the net cost of an ASHP installation to approximately £3,000-£8,000 for a typical rental property (depending on size and existing heating infrastructure), making the economics of heat pump installation significantly more viable than before the grant increase.
The critical practical issue for landlords is that heat pumps do not always perform well in poorly insulated, older rental properties — they work most efficiently when operating at lower flow temperatures, which requires either good radiator coverage (typically larger radiators than a gas boiler system requires) or underfloor heating. Landlords considering heat pumps should commission a proper heat loss calculation before installation, check the suitability of the existing radiator circuit, and ensure the property achieves at least EPC C or D before installing a heat pump. A gas boiler replacement with a heat pump in a leaky, poorly insulated property may result in uncomfortable tenants and high running costs — undermining both tenant retention and any EPC improvement.
Future MEES EPC C trajectory, Boiler Upgrade Scheme and Scotland/Wales obligations
The decarbonisation obligations and grants available to landlords across all UK jurisdictions:
- Future MEES EPC C trajectory (England and Wales) and the Boiler Upgrade Scheme: Current MEES (England and Wales): the Minimum Energy Efficiency Standards Regulations 2015 (SI 2015/962) require that all domestic private rented properties in England and Wales achieve at least an EPC E rating (Band E or above). The current rules apply to: all new tenancies granted on or after 1 April 2018; all existing tenancies (continuation tenancies) from 1 April 2020. Landlords who cannot achieve EPC E cannot grant a new tenancy — the 'no-let rule' applies. Exemptions are available (registered on the PRS Exemptions Register) for: high cost (cost cap of £3,500 has applied to MEES compliance works since 2020); consent refused by tenant or third party; property devaluation; temporary exemptions. Civil penalty for non-compliance: £5,000 per property (raised from £4,000 in 2024). Future MEES — EPC C proposed trajectory (England): the government has consulted on upgrading the minimum standard to EPC C. The proposed timeline (as per the 2022 consultation and subsequent policy development): EPC C or above for all new and renewed tenancies from 2028; EPC C or above for all existing tenancies from 2030. A new cost cap per property is under consultation — proposals have included £10,000 and £15,000 per property. As of June 2026, this trajectory has not yet been enacted in legislation — landlords should monitor for the forthcoming MEES Regulations (expected as secondary legislation under the Energy Act 2011). Boiler Upgrade Scheme (BUS) 2026: the BUS provides capital grants to help with the upfront cost of installing low-carbon heating systems. Grant amounts from April 2022 (updated 2023): Air Source Heat Pump (ASHP) — £7,500 grant; Ground Source Heat Pump (GSHP) — £7,500 grant. Eligibility: property must be in England or Wales; must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft insulation or cavity wall insulation (if applicable) — if the EPC recommends insulation that hasn't been done, the grant cannot be claimed until that insulation is installed or an exemption is obtained. The property must be a private domestic dwelling (includes rental properties — landlords are eligible applicants). The grant must be claimed through an MCS (Microgeneration Certification Scheme)-certified heat pump installer. Air source heat pumps in rental properties: ASHP draws heat from outside air and uses it to heat the property via a refrigeration cycle; COP (Coefficient of Performance) of 2.5-4 (every 1 unit of electricity generates 2.5-4 units of heat); requires adequate outdoor space for the external unit; quieter than older models; needs a properly sized radiator circuit or underfloor heating for best performance at low flow temperatures. Average installed cost of ASHP (2026): £9,000-£15,000 (before BUS grant of £7,500). Future Homes Standard (England): regulations requiring all new homes to meet a 75-80% reduction in carbon emissions compared to the 2013 Part L Building Regulations standard; effective for new-build homes in England from 2026 (delayed from original 2025 target); new homes will be built ready for heat pumps as primary heating; gas connections will not be installed as standard in new-build residential properties. Impact on new-build BTL: landlords purchasing new-build buy-to-let properties from 2026 onwards will receive properties with heat pump heating and improved fabric — already meeting or approaching the proposed EPC C standard.
- Scotland — Heat in Buildings Strategy, Wales Clean Heat Scheme and EPC reform: Scotland — Heat in Buildings Strategy: the Scottish Government published the Heat in Buildings Strategy (2021) setting out Scotland's pathway to decarbonising all buildings by 2045. Key targets: all homes to reach EPC C or equivalent by 2033; all off-gas-grid homes (using heating oil or LPG) to have zero-emissions heating systems by 2025 (proposed; timetable under review). Private Landlord obligations (Scotland) — current: the Private Rented Housing (Energy Efficiency) (Scotland) Regulations 2020 set the current Scottish MEES for private rented properties: EPC E minimum for all new tenancies from 1 April 2020; EPC E minimum for all existing tenancies from 31 March 2022. Scotland additionally requires landlords to provide information about energy efficiency at the start of a tenancy. Future private landlord standard (Scotland): the Scottish Government has proposed extending the Repairing Standard (Housing (Scotland) Act 2014 s.14) to include an EPC C or equivalent requirement for private rented properties. The proposed timeline is: EPC C or equivalent by end of 2025 (deferred); currently proposed for end of 2028 (subject to Scottish Parliament legislation and consultation — not yet enacted as of June 2026). Landlords in Scotland should begin planning now for EPC C upgrades — the 2028 target, if enacted, will apply to all existing Scottish tenancies and leaves less time than England's proposed 2030 deadline. Scottish Government grants: the Warmer Homes Scotland programme (Heat in Buildings grant); Cashback for Landlords and the Landlord Loan Scheme (check current availability at gov.scot/heat-in-buildings for current Scottish landlord incentives). Wales — Clean Heat Scheme and EPC obligations: Wales has its own decarbonisation obligations under the Future Wales national planning policy and Net Zero Wales (Carbon Budget 2); the Welsh Government Clean Heat Scheme provides grants towards low-carbon heating (including heat pumps) for eligible Welsh households and landlords — check current Welsh Government guidance for scheme eligibility and amounts. Welsh MEES: Wales follows the same MEES EPC E minimum as England under the 2015 Regulations. Future Welsh EPC C target: the Welsh Government has indicated alignment with the EPC C ambition for the private rented sector; the specific timeline and legislation for Wales will differ from England. EPC reform — SAP 10.2 and numerical scoring: current EPCs use SAP (Standard Assessment Procedure) version 10.2; EPCs produce A-G band ratings based on SAP score. The government has consulted on reforming the EPC regime: moving from A-G bands to numerical scoring; changing the primary metric from operational energy efficiency to operational carbon emissions; updating the SAP methodology to SAP 11 (in development). Landlords should be aware that under a reformed EPC regime, the rating of properties will change — properties that currently achieve EPC D on operational energy efficiency may achieve a different rating on an operational carbon basis. Monitoring the EPC reform consultation outcomes is advisable before making significant capital investment decisions based solely on current EPC ratings
Frequently asked questions
Can a landlord claim the Boiler Upgrade Scheme grant for a rental property?+
Yes — landlords are eligible applicants for the Boiler Upgrade Scheme (BUS), which provides £7,500 towards an air source heat pump (ASHP) or ground source heat pump (GSHP). The property must be in England or Wales; must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation; and the heat pump must be installed by an MCS-certified installer who claims the grant on the landlord's behalf. There is no requirement that the landlord lives in the property — buy-to-let rental properties qualify, making this the most significant available subsidy for landlords decarbonising their portfolios.
What is the proposed minimum EPC standard for private rented properties by 2030?+
The government has proposed that the minimum EPC standard for private rented properties in England should rise from EPC E (current) to EPC C — requiring all new and renewed tenancies to achieve EPC C by 2028, and all existing tenancies to achieve EPC C by 2030. As of June 2026, this has not yet been enacted in legislation — it remains a proposed policy requiring secondary legislation (new MEES Regulations). Landlords should plan and budget for the upgrade on the assumption the trajectory will be enacted, but monitor for the actual legislation before committing to all works. A new cost cap per property is also under consultation.
Does Scotland have a different EPC requirement for private rented properties?+
Yes. Scotland has its own MEES framework: the current minimum is EPC E (same as England) under the Private Rented Housing (Energy Efficiency) (Scotland) Regulations 2020. However, the Scottish Government has proposed extending the Repairing Standard to require EPC C or equivalent for all private rented properties by end of 2028 — two years ahead of England's proposed 2030 deadline. This has not yet been enacted in Scottish Parliament legislation (as of June 2026). Scottish landlords should treat the 2028 target as a planning horizon and begin EPC assessments and upgrade plans now.
Do heat pumps work well in rental properties?+
Heat pumps can work well in rental properties when installed in appropriately insulated buildings with correctly sized heating circuits. For best performance, a heat pump needs: good fabric insulation (EPC C or above ideally); radiators sized for low flow temperatures (typically larger than those used with a gas boiler) or underfloor heating; a compatible hot water cylinder. Older properties with poor insulation and undersized radiators may experience higher running costs. Before installing an ASHP, commission a proper heat loss calculation, check radiator sizing, and consider whether fabric improvements (loft insulation; cavity wall insulation) should be done first — these may also be required to claim the Boiler Upgrade Scheme grant.
- MEES — current EPC E minimum and exemptions →
- EPC C upgrade — works, costs and how to improve your rating →
- EPC C cost cap 2030 — proposed £10,000 landlord cost limit →
- EPC exemptions — high cost, consent, devaluation exemptions →
- Gas boiler ban — timeline and replacement obligations →
- Energy efficiency improvements — ECO4, Green Homes Grant and cavity wall →