Prime Minister Boris Johnson wants landlords and other homeowners to replace oil and gas boilers. Instead, the goal is to use low carbon alternatives like heat pumps to reach net-zero emissions by 2050.
But many homeowners need to clear the air over whether heat pumps are cost-effective and workable.
And not everyone is familiar with the technology. In December 2020, a poll revealed 43 per cent of people had never heard of an air source heat pump and had no idea how they work.
So we turned to the independent advice service The Energy Saving Trust to find out more. Here, we share what we learnt about the technology. We also discuss the government’s Heat and Building Strategy for the long-term plan for upgrading homes.
£5,000 grant too little, says heat pump industry
Business and energy secretary Kwasi Kwarteng has announced a £5,000 grant to help landlords upgrade the boilers in their rented homes with new technology, like air or ground source heat pumps.
Full details of the scheme are awaited, but Kwarteng has confirmed the grants are available for landlords – just not how much.
Commentators in the industry point out the £450 million available for grants allows for 90,000 boiler upgrades out of the country’s 29 million homes.
“As the technology improves and costs plummet over the next decade, we expect low-carbon heating systems will become the obvious, affordable choice for consumers,” said Kwarteng.
“Through our new grant scheme, we will ensure people can choose a more efficient alternative in the meantime.”
Nevertheless, the heat pump industry welcomes the government’s upgrade scheme.
“The announcement gives the industry a confidence boost that now is the time to scale-up and retrain for the mass roll-out of heat pumps,” said Phil Hurley of the Heat Pump Association.
“The scheme makes heat pumps more affordable, so all consumers can soon access and enjoy the benefits of reliable low carbon heating.”
Setting the record straight on heat pumps
The Energy Saving Trust has published the truth about some common low carbon heat pump myths:
- Air source heat pumps are no noisier than your fridge. Because they are installed outside, you should hear no noise from them indoors.
- Ground source heat pumps are operational all year round and work well in temperatures that drop to -15° Centigrade or below
- Heat pumps work with radiators and underfloor heating
- You can install heat pumps for any building as they go outdoors and link to the existing heating system
- Heat pumps can supply hot water and central heating
- Heat pumps are no harder to maintain than boilers. They have a 20 years or more lifetime if they are serviced each year
- Installing a heat pump is not compulsory, so landlords can keep their conventional boilers rather than install a new system
How do heat pumps work?
Heat pumps are simply refrigerators in reverse.
Instead of taking the heat away from the fridge or freezer to keep the contents cool, a heat pump extracts heat from the air or ground outside. It then can heat a building or hot water in the cold weather and acts as air conditioning in the summer.
How much do heat pumps cost?
According to the Energy Saving Trust, a properly installed heat pump gives more bang for the buck than a conventional boiler.
The trust estimates replacing a G-rated gas boiler with an air source pump saves a family in an average-sized four-bedroom home up to £375 a year in energy bills.
The running cost will fluctuate against the cost of electricity that powers the system.
Buying and installing a heat pump ranges from £3,000 to £10,000, according to EDF Energy. In addition, you may have to spend some money on insulating your home to make the heating more efficient.
The heat is on landlords
The government is piling pressure on landlords to make their homes more energy-efficient.
Buy to let homes must attain a C-rated Energy Performance Certificate (EPC) by April 2035. If they don’t, landlords cannot rent them out. However, the Climate Change Committee wants to see this happen by 2028.
Besides offering financial help, like the heat pump upgrade grant, home insulation improvements are relatively cheap.
Putting a jacket on a hot water cylinder or switching to low-energy lighting cost less than £50. While laying more insulation in a loft is no more than £250.
Ignoring the low carbon shift for rented housing may be a false economy.
The government is asking buy to let lenders that penalise landlords renting out energy inefficient homes by offering smaller loans at higher interest rates on homes with poor EPC ratings.
Around one-in-five lenders offer energy efficiency discounts to landlords, reducing their interest rates by up to 0.5 per cent. However, some refuse to lend more than 80 per cent loan-to-value against rental homes with an EPC rating of less than C.
A spokesperson for The Mortgage Works, the Nationwide’s buy to let lending arm and Britain’s second-largest landlord lender, said: “The Department of Business, Energy and Industrial Strategy is leading the Improving the energy performance of privately rented homes consultation, which is currently looking to increase the EPC requirement to a C rating for all tenancies by 2028.
“To support a key segment of the buy-to-let market, while recognising future ambitions across the private rental sector to achieve more energy-efficient homes, TMW’s range of 80% LTV products will only be available where a property has an EPC rating of C or above.”
At Oasis Living, we use tech and automation to make the letting process more efficient and less hassle for all involved. Additionally, you won’t need to worry about keeping up with changes in tech and legislation. We offer premium property management, FAST tenant-find service and even free maintenance call out as a standard. Contact one of our property letting experts today to find out more.