Up to 300,000 homes to benefit from upgrades with the rollout of the Warm Homes Plan in 2025

1 Help to save households money and deliver cleaner heat to homes
2 Packages announced include
3 Stakeholder reaction
4 Related articles on Designing Buildings

[edit] Help to save households money and deliver cleaner heat to homes

In November 2024 the UK government announced a wide-ranging package as a step in delivering the Warm Homes Plan, by helping people find ways to save money on energy bills and deliver warmer, cleaner to heat homes, with up to 300,000 homes to benefit from upgrades in 2025. The offers would include grants for heat pumps, support for renters and low-income households, and new investment in British manufacturing and government will also deliver planning reform by removing the one-meter rule that required planning permission to get a heat pump in England.

The plans include boosting the budget for the Boiler Upgrade Scheme to support more households switch to a heat pump – which can save families around £100 a year compared to a gas boiler by using a smart tariff effectively, and insulating more homes across the country – potentially saving homeowners around £200 per year.

The wide-ranging package is another important step in delivering the Warm Homes Plan and reaches across all households, saying it was supporting :

'homeowners in England and Wales to get a £7,500 heat pump grant through the Boiler Upgrade Scheme, which had the highest number of applications ever in October according to Ofgem'
'households install an air source heat pump without needing to submit a planning application in England – removing the 1m rule, with figures from Octopus showing 34% of those who order a heat pump are discouraged or drop out for reasons attributed to planning permission'
'social housing residents, lower income householders and renters to receive funded energy efficiency upgrades - including insulation and low-carbon heating - through the Warm Homes: Social Housing Fund and Warm Homes: Local Grant respectively'

Working alongside the government’s mission to make Britain a clean energy superpower, the Warm Homes Plan will ensure millions more households benefit from homegrown energy delivered by every new turbine, solar panel or pylon built on the path to energy independence.

Minister for Energy Consumers Miatta Fahnbulleh said:

'The idea at the heart of our Warm Homes Plan is a simple one – all families deserve the security of a home they can afford to heat. But for too long, that has been out of reach for far too many people who have been left with draughty homes and sky-high bills. That is why we are taking immediate action today to make cleaner heating available to more households. This follows our plan to lift over one million households out of fuel poverty by consulting on boosting minimum energy efficiency standards for all renters by 2030, delivering warmer homes and cheaper bills.'

'Households have paid the price in recent years of the energy bill crisis, following Putin’s illegal invasion of Ukraine, which exposed years of over reliance on international gas markets. The government is now overturning this legacy by investing in homegrown, cleaner energy free from the control of dictators.' the press release said.

[edit] Packages announced include

[edit] Support thousands more households with home upgrades

Helping thousands more families to get £7,500 off the cost of a heat pump, with an extra £30 million for the Boiler Upgrade Scheme this financial year, while almost doubling the budget to £295 million for the next financial year
Overseeing around £3.2 billion of investment in warmer homes across 2025 to 2026 from government, social housing providers and supplier obligations, delivering measures to help lower bills and support cleaner heating to up to 300,000 households

[edit] Deliver new regulations to back consumers and encourage innovation

Lifting over 1 million households out of fuel poverty under plans to consult on increasing minimum energy efficiency standards for all rented homes by 2030
Consulting on plans to increase energy efficiency standards for new boilers and heat pumps, saving households with a new gas boiler £30 a year on running costs
Allowing more households in England to install an air source heat pump without the need to submit a planning application from early next year, by removing the rule requiring them to be installed at least one metre from a property’s boundary. This will provide greater flexibility, with rules still in place around listed buildings

[edit] Back British manufacturers

Introducing a reformed Clean Heat Market Mechanism on 1 April 2025, with new changes to make sure manufacturers have the time they need to scale up supply chains, making heat pumps an even more attractive choice for households and boosting sales without penalising those buying a new gas boiler. There will also be government support available for each and every heat pump installation that is required under the mechanism in 2025 to 2026
Supporting industry by investing over £5 million in Ideal Heating as the very-first award from the Heat Pump Investment Accelerator competition, kickstarting a homegrown heat pump industry to boost the UK’s energy security and support hundreds of low-carbon jobs
Working with trade unions to ensure good jobs throughout the supply chain, backing Britain’s world class traders

This follows a landmark announcement from the National Wealth Fund, whose financial guarantees enabled up to £1 billion of funding from Barclays UK Corporate Bank and Lloyds Banking Group to help housing associations provide warmer, more energy efficient homes to tenants across the country.

By charting a bold new approach to delivering warmer homes and taking immediate action to speed up the rollout of cleaner heating, the government will cut energy bills, tackle fuel poverty and create new opportunities for jobs and skills right across the country.

[edit] Stakeholder reaction

Mike Foster, Chief Executive, Energy and Utilities Alliance, said: 'Minister Fahnbulleh has constructively engaged with industry and British manufacturers, who have warmly welcomed this new approach. By working in partnership, we have an outcome which no longer unfairly penalises business and consumers. That is a big win for households across the country.'

Greg Jackson, CEO, Octopus Energy, said: 'More than a third of customers who order a heat pump drop out because of planning issues, leaving them stuck with dirty, inefficient gas boilers. Removing outdated and unnecessary red tape is an urgent priority to grow this sector and get low cost, safe, clean heating technology into British homes.'

Dhara Vyas, CEO, Energy UK, said: 'It is welcome to see the government increase funding for the Boiler Upgrade Scheme (BUS), set out more detail on the Clean Heat Market Mechanism (CHMM), and remove planning barriers to heat pump installations. This is a clear recommitment to heat decarbonisation, which will play a vital role in improving energy security and reducing our reliance on gas. The BUS is enabling consumers to install heat pumps at record rates, with demand for low carbon technologies increasing. It is right that the government does not further delay delivery of the CHMM, as this mechanism is vital to increasing availability of heat pumps and attracting investment into UK manufacturing. The industry stands ready to work with government to ensure the CHMM is effective and ambitious, enabling customers to choose when they make the transition, while also developing robust low carbon heat supply chains and markets in the UK.'

Kate Henderson, Chief Executive of the National Housing Federation, said: 'With England’s homes producing more carbon each year than all the country’s cars, housing associations are committed to playing their part in tackling the climate emergency and supporting the government to meet its net zero targets, through decarbonising their homes. We welcome the confirmation of the boost in funding, which is essential to this work, kickstarting the government’s Warm Homes Plan and helping tackle fuel poverty. The policy measures announced today will be essential to this shared mission, scaling the supply chain and driving down the costs of the clean, efficient home heating systems of the future. We look forward to working with the government ahead of next year’s Spending Review on the design of the full Warm Homes Plan, and in bringing forward their manifesto commitment of a significant increase in funding for retrofitting homes.'

Adam Scorer, National Energy Action’s Chief Executive, said: 'National Energy Action (NEA) welcome this significant additional investment which kick starts the emerging Warm Homes Plan. Warm homes are the foundation of healthier, happier, more productive lives, especially for fuel poor households facing higher costs on the lowest incomes. NEA knows that these households often suffer ill-health which is worsened in cold conditions. We look forward to work with government to realise the full ambition and benefits of a comprehensive plan for Warm Homes.'

Stew Horne, Head of Policy at Energy Saving Trust, said: 'This package of announcements brings welcome detail on how the UK government will support people in practice to install low carbon heating and incentivise the supply chain to meet demand. We welcome the removal of a key barrier to heat pump installation and confirmation of additional funding for the Boiler Upgrade Scheme. Likewise, the Clean Heat Market Mechanism will play an important role in reducing the upfront cost of heat pumps, encouraging manufacturers to offer competitive deals. It also provides much needed certainty for industry and the supply chain to scale up to meet the UK government’s ambition. Signalling the upgrade of 300,000 homes to make these warmer, more affordable to heat and cutting carbon, is a welcome start to the Warm Homes Plan that offers a benchmark for scaling up. We look forward to seeing more about the programme of delivery to make this happen.'

Charlotte Lee, CEO, Heat Pump Association, said: 'The package of measures announced by the government today demonstrates their commitment to accelerating the decarbonisation of heat in the UK. We welcome the clarity provided to the market on the long-anticipated Clean Heat Market Mechanism and the confirmation of additional funds for the BUS, both of which enable the sector to invest with confidence. The changes to the Permitted Development Rights will help to streamline the heat pump installation process for installers and consumers and support an accelerated deployment of heat pumps over the coming years.'

Bean Beanland, CEO, Heat Pump Federation (HPF), said: 'The incoming government has come flying out of the blocks on macro-energy policy, but has been more measured in its approach to the energy transition at domestic scale. This set of announcements by the Secretary of State marks, what we hope will be, a series of initiatives over coming months, designed to encourage the uptake of decarbonised heating solutions in homes across the UK.From the work undertaken by the Heat Pump Federation with community groups across the land, it’s clear that the appetite for genuine and robust information, and for a positive set of messaging, is strong. Measures such as those announced today, together with future changes that are already in consultation or discussion, will continue to build confidence with both consumers and with our sector’s supply chain, so that homeowners and landlords are assured that the transition away from fossil fuels can be taken as their existing boiler reach end-of-life. The HPF very much looks forward to working with ministers to maximise the values to be realised, including the development of a vibrant and profitable UK heat pump manufacturing sector, and a workforce with enhanced skills in the clean industries of the future. The opportunity for significant social good, by way of warmer homes, lower energy costs, great jobs and improved air-quality, is real, ensuring that everyone can benefit from a zero carbon future.'

Madeleine Gabriel, Director of Sustainable Future at Nesta, said: 'The announcements will make it easier for people to upgrade to heat pumps. This gives a clear signal to the public and industry that the government is committed to supporting the transition to low carbon heating. In particular, these changes rightly cut the red tape that was creating extra cost and hassle for homeowners and more work for local councils. Heat pumps are proven to be an efficient and reliable technology, and removing the ‘1-metre rule’ will make it easier for people to choose a low carbon future for their homes.'

Ian Rippin, CEO at MCS (Microgeneration Certification Scheme), said: 'The confirmation of the Clean Heat Market Mechanism is a positive step for the sector and the changes to support the scaling up of the industry address concerns previously expressed. We look forward to continuing our work with the scheme to ensure that heat pump installations are to industry-recognised standards and are accurately recorded and reported. This is crucial in giving everyone confidence in the technology. The announcement of changes to Permitted Development Rights are another welcome move that will support the deployment of heat pumps. We have worked to coordinate the industry’s responses and support with updates to tools and our standards, such as the MCS Planning Standard for Permitted Development Installations of Air Source Heat Pumps (MCS020), to facilitate these changes. The Boiler Upgrade Scheme has been a great success in supporting the industry – we welcome any additional funding and look forward to the scheme continuing to grow and expand.'