How a heat pump increases the value of your property

There are many reasons to choose a heat pump. That’s why Daikin has created the whitepaper Drivers to Heat Pump Adoption by European Households, offering fact-based insights to help consumers make an informed decision. It explores key factors such as energy cost savings, government incentives, environmental impact, and the role of heat pumps in future-proofing homes.

In this article, we’ll focus on how improving your property's energy efficiency with a heat pump can directly increase its value.

One of the biggest selling points of heat pumps for homeowners is the positive impact installing one could have on the property's value.

Energy efficient properties have higher sale and rental values than properties that consume more energy and have higher carbon emissions. Installing a heat pump can give your home a better energy rating, and because it cuts down on energy use and provides a greater level of comfort to the occupants, you can command a higher sale or rental price.

Heat pumps = better energy ratings

Any property for sale or rent in the UK has to have an Energy Performance Certificate (EPC), which provides information about how energy efficient it is.

A certified professional looks at the characteristics of the house (such as size, age, construction materials used, type of heating etc), and estimates its energy consumption and greenhouse gas emissions. Then they give it an energy rating from A (the most energy efficient) to G (the least energy efficient).

Prospective buyers or tenants often use the EPC rating to decide whether to buy or rent a property – and how much to pay.

The good news is that installing a heat pump improves energy ratings in almost all scenarios, because they are more energy efficient than other forms of heating, often resulting in a jump of one or more energy bands. The extent of the improvement depends on two factors:

1. What type of heating system you had before (for example if you had a gas or oil boiler)
2. Whether you changed your radiators or installed underfloor heating at the same time

Essentially, if your home was rated E with a gas boiler, it is possible to be rated a D with a heat pump. If you upgrade your radiators at the same time, you might even be able to achieve a C rating.

How much could your home increase in value?

You could enjoy a significant uplift in value on both on the sale price and rental income you could command – in the region of 2-8%.

Recent research^[1] found that improving a property’s energy performance rating by one band from a D to a C added 3% to its value compared to the local average. This equates to a £9,000 premium. Homes that moved up two bands from an E to C saw an average uplift of 8.8% (or over £29,000).

Another study^[2] puts the increased sales value from installing a heat pump at £5,000-£8,000 on average (excluding installation costs).

If you want to ask a premium for your property when you come to sell it, consider installing a heat pump. It should pay off financially in the long run.

[1] Source: Knight Frank
[2] Source: WWF and Scottish Power "Better Home, Cooler Planet"(2022)

For detailed data, sources, and references, please refer to the full whitepaper (available for download in English).