What Is a Heat Pump and Should London Homeowners Consider One?

How Heat Pumps Work

A heat pump does not generate heat by burning fuel — it moves heat from one place to another, using electrical energy to do so. An air source heat pump extracts heat energy from outdoor air (even at temperatures as low as -15°C there is usable heat energy in the air) and concentrates it for delivery into the home's heating and hot water system. The principle is the same as a refrigerator operating in reverse — a refrigerator moves heat out of the cabinet into the room; a heat pump moves heat from outside the building into it.

The efficiency measure for heat pumps is the Coefficient of Performance (CoP) — the ratio of heat energy delivered to electrical energy consumed. A heat pump with a CoP of 3.0 delivers 3kW of heat for every 1kW of electricity consumed, equivalent to 300% efficiency. In comparison, a modern condensing gas boiler operates at approximately 90% efficiency — 90p of heat for every £1 of gas input. In engineering terms, heat pumps are significantly more efficient than gas boilers.

The two main types for residential use are:

• Air source heat pump (ASHP): Extracts heat from outdoor air. Requires an outdoor unit (approximately the size of an air conditioning condenser unit) mounted on an external wall or on the ground. This is the most practically relevant option for London properties.
• Ground source heat pump (GSHP): Extracts heat from the ground via buried pipes or boreholes. Significantly more efficient than ASHP due to the stable ground temperature, but requires substantial ground area or borehole drilling. Impractical for the vast majority of London properties, which lack the garden size or have no land at all.

The Efficiency Advantage — and Its Limits

The CoP advantage of heat pumps over gas boilers is real but has an important caveat: it must be assessed against the relative cost of electricity versus gas per unit of energy, not just the efficiency ratio.

As of 2025, electricity in the UK costs approximately four times as much per kWh as gas. A heat pump with CoP 3.0 delivering 3kW of heat from 1kW of electricity at four times the unit cost of gas is approximately as expensive to run as a 90% efficient gas boiler, not dramatically cheaper. This is often not communicated clearly in heat pump marketing material.

The expectation in government and industry is that the electricity-to-gas price ratio will narrow as the grid decarbonises and policy support for heat pumps increases — but this has not happened yet. For most London homeowners in 2025, running costs on an air source heat pump are broadly comparable to or slightly higher than a modern gas boiler, depending on the system's actual achieved CoP in the specific property.

Suitability for London Properties

This is the critical issue for London homeowners. Heat pumps operate efficiently when delivering heat at relatively low flow temperatures — typically 35–45°C. A gas boiler typically delivers 70–80°C to radiators. The lower flow temperature from a heat pump means the same radiators will deliver less heat output per unit time. For a heat pump to maintain comfort at low flow temperatures, one or more of the following must be true:

• The property is well insulated: A poorly insulated building loses heat quickly — the radiators must be running hot and continuously to maintain temperature. A well-insulated building loses heat slowly, meaning lower-temperature heat delivery is sufficient to maintain comfort.
• The radiators are appropriately sized: Larger radiators at lower flow temperatures deliver equivalent output to smaller radiators at high flow temperatures. Most period London terraces have radiators sized for 70°C flow temperature systems. Converting to a heat pump without replacing or supplementing radiators risks under-heating.
• There is space for an outdoor unit: The ASHP outdoor unit requires external space — a rear garden, a side return, or adequate space on an external wall. London terraces and most converted flats have constrained external space, and permitted development rights for heat pump outdoor units have specific size and location requirements.

London's housing stock challenges these conditions significantly:

• Victorian and Edwardian terraces — which constitute a large proportion of inner London's housing — have single-skin rear additions, original single-glazed windows (in many cases), and variable insulation depending on when the property was last renovated. Many are not adequately insulated for heat pump operation without substantial prior insulation work.
• Converted flats typically share walls and floors with neighbouring flats (limiting heat loss but also limiting the scope for insulation improvement). They also have limited space for outdoor units and may require freeholder or building management consent.
• Leasehold properties may require landlord consent for external modifications, complicating the installation of an outdoor unit.

The Boiler Upgrade Scheme Grant

The government's Boiler Upgrade Scheme (BUS) provides a grant of £7,500 for the installation of an air source heat pump in eligible properties. The grant is applied at the point of installation — the heat pump installer applies for the grant on the homeowner's behalf and the cost of the installation is reduced by £7,500 at invoice.

Eligibility requirements include:

• The property must be in England or Wales
• The property must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft insulation or cavity wall insulation (if applicable)
• The installer must be registered with the Microgeneration Certification Scheme (MCS)

The grant significantly reduces the up-front cost of installation — a typical London air source heat pump installation costs £10,000–£16,000 before grant, reducing to £2,500–£8,500 after. However, the grant does not change the fundamental suitability question — a poorly insulated period property receiving a £7,500 grant still requires substantial additional insulation work before the heat pump will operate efficiently.

A Realistic Assessment for Most London Homeowners

For a London homeowner in a well-insulated modern or recently renovated property with a reasonable garden, an air source heat pump is a viable and environmentally sensible heating solution. For the majority of London homeowners in period terraced houses or converted flats with original fabric, a heat pump is not the right choice today — not because the technology doesn't work, but because the property is not yet ready for it.

The most pragmatic approach for most London homeowners:

• If the current boiler needs replacing now, replace it with a high-efficiency condensing gas boiler. A new boiler will last 10–15 years — by the time it needs replacing again, the electricity-to-gas price ratio may have shifted, heat pump technology will have improved, and the grid will be cleaner.
• Use the intervening years to improve insulation (loft insulation, cavity wall if applicable, secondary glazing where planning permits), and to assess whether larger radiators in key rooms would make future heat pump operation viable.
• If you are undertaking a major renovation — stripping back to structure and rebuilding — this is the right time to design in heat pump compatibility: adequate insulation, oversized radiators or underfloor heating, appropriate outdoor unit space.

When It Does Make Sense

Heat pumps are genuinely the right choice in London today for:

• Newly built properties (built to current Building Regulations insulation standards)
• Properties that have undergone comprehensive fabric-first renovation including full external or internal wall insulation, triple glazing, and well-sealed construction
• Properties with no gas supply (off-gas-grid) where the comparison is with oil, LPG, or electric resistance heating — all of which are more expensive to run than a heat pump
• Homeowners who have already carried out a proper heat loss calculation and confirmed that their property's insulation and radiator sizing is compatible with 40–45°C flow temperature operation