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The benefits and costs of switching to a heat pump

By Sophia Wood-Burgess

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Around this time of year, we remind homeowners and Landlords about the importance of boiler maintenance. We also recommend our tenants turn on the heating before it gets cold, so we can sort any problems before they become urgent. However, we’ve been getting a lot of questions about heat pumps lately, so we thought we’d share some insight from our specialists at Foxtons Property Management for property owners considering a change.

🔥 A hot topic

The Government has just announced revisions to its Net Zero plan, which includes raising the Boiler Upgrade Grant by 50% – that’s £7,500 for homeowners who replace their boiler with a heat pump. Of course, these plans could easily change again. However, this news brings the topic of heat pumps even further into the spotlight, so it’s worthwhile to see if they deserve the attention.

Time for an upgrade?

Why to service your boiler in early autumn:

✔ Get ahead of the rush in engineers’ diaries

✔ Save yourself undue stress in the busy holiday season

✔ Ensure your tenants are safe and secure in your property

✔ Protect your boiler’s warranty

This year, many property owners will simply get boiler issues repaired and continue on with the same machine. If the boiler needs replacing, some will swap it out for a new model, however some property owners may take the opportunity to get a heat pump.

Many will have their eye on the Boiler Upgrade Grant, and those getting ready to sell will wonder how a new heating system could benefit their asking price…so, is a heat pump a good call?

What is a heat pump?

A heat pump uses electricity to capture heat from outside (even in cold temperatures) and move it into your home. In this way, it heats up a home more gradually and works well with underfloor heating and well-insulated homes. Many modern air conditioning units are “dual inverters,” which means they can be used to cool a home in summer and as a heat pump in winter.

A boiler, on the other hand, runs on gas to heat a home quickly at a high temperature. It works well with radiators, and it suits older, less energy efficient buildings.

Is installing a heat pump worth it?

It can be, but it depends entirely on the property in question. If the property is well insulated and has the right space requirements for a heat pump, the savings can be significant (see table below). However, a heat pump often incurs retrofitting costs. It also has to work much harder to heat a poorly insulated property, and electricity tends to cost more than gas, so it’s best to the upfront costs can easily outweigh the benefits of a heat pump.

How much does it cost to heat a UK home?

Energy Savings Trust says the average energy usage of a gas-heated home is 12,000kWh, and of an electrically heated home is 8,000kWh. So, using those as a standard:

Outdated (D-rated) Gas Boiler New (A-rated) Gas Boiler Electric Convention Heater Heat pump
Optimal efficiency 82% 90% 100% 400%
For standard energy usage 14,160kWh 13,200kWh 8,000kWh 2,000kWh
Average price (pence/kWh) £0.08 £0.08 £0.30 £0.30
Annual cost £1,132.80 £1,056 £2,400 £600

[Sources: British Gas, Energy Saving Trust]

Back to the question of whether it’s worth switching to a heat pump, we also need to factor in installation and retrofitting. According to Energy Guide, if you’re switching from an older gas boiler to a heat pump in an established home, you can anticipate (very roughly) around £28,000 for retrofitting. This means, with the money you save in heating your home, it’ll take you almost four-and-a-half years to break even and begin enjoying the £532.80 annual energy savings of switching to a heat pump. Of course, these estimates are all based on the average home and usage, and the very unlikely event of energy prices never changing in the years to come.

However, the chart demonstrates why heat pumps are such a hot topic right now. The older method of electric heating (an electric convention heater) could cost you more than a gas boiler. Electricity is more expensive than gas, so its heating needs to be much, much more efficient for people to consider replacing their gas boilers. This chart also shows why retrofitting is so important; the reason heat pumps can save you money is that they can be 400% efficient, but if you have a poorly insulated, older home, a heat pump won’t be as efficient as it needs to be to save you money.

One more thing to consider, a gas boiler needs to be replaced about every 10 years, while a heat pump can last 20 or even 30 years if properly maintained.

The power of technology

Air conditioning has come a long way. There are so many features that help create a healthier environment and save homeowners money:

• Zoned systems: Some AC units allow users to set the temperature in different areas or ‘zones’ of their home, i.e. put less energy towards heating the utility room, or only keeping the home office warmer during working hours.

• Thermostat: homeowners can also prioritize when their home should be heated, setting different weekday and weekend schedules or choosing when it’s most important to turn up the heat.

• Cleaner air: Many modern AC systems clean the air, sterilising against viruses and pathogens, filtering out dust and pollen, and regulating humidity. This leads to fresher, cleaner air and less mould growth.

Plenty to think about

There isn’t an easy answer on whether it’s the right time for you to get a heat pump. It may be a worthwhile investment, depending on the property and how much you can put into it now. At the same time, winter is around the corner, so you don’t want to be caught out in the middle of an extensive retrofitting project when the cold creeps in.

If you are a Landlord, Foxtons Property Management can put you in touch with the right experts and get you all the information you need to make this decision. For instance, to apply for the Boiler Upgrade Grant, you'll need a valid EPC with no outstanding recommended loft or cavity wall insulation installations (or an exemption), so we can put you in touch with an accredited energy assessor to get your EPC up to date.

Did you know, even if you didn’t list your property with Foxtons, you can use our exceptional Property Management service? Learn more about this service here.

For our Landlords who’ve opted for a fully managed service, we will work with our network of vetted tradespeople to bring you reliable quotes, and we’ll oversee the work on the optimal timeline for you.

If you are planning to sell the property, whatever state the boiler is in, we recommend you get a free Foxtons Property Valuation first, before starting any major work. Our experts can discuss the local market with you, so you get the timing spot on and achieve the right price for your property.

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