How Do Heat Pumps Work? UK Homeowner Guide

Your fridge works by pulling heat out of the food and dumping it into your kitchen. A heat pump does the same thing in reverse. It pulls heat out of the outside air and dumps it into your home. That's genuinely it.

The bit that trips people up is the idea that you can extract heat from cold air. It sounds wrong. But the air outside, even at 0°C, contains usable thermal energy. A heat pump captures that energy, concentrates it, and delivers it to your radiators or underfloor heating at a temperature that keeps your house warm. For every £1 of electricity it uses, you get roughly £3.50 of heat back. A gas boiler running at 90% efficiency gives you 90p of heat for every £1 of gas. The economics shift fast once you see those numbers.

How Does a Heat Pump Actually Work?

The fridge analogy covers the concept. Here's the mechanism, kept simple.

Inside the outdoor unit sits a refrigerant, a fluid with an extremely low boiling point (around -25°C to -40°C). Even when it's freezing outside, the air is still warmer than that refrigerant. So the refrigerant absorbs heat from the air and evaporates into a gas. An electric compressor then squeezes that gas into a smaller space, which forces its temperature up to 50°C to 75°C. The hot gas flows through a heat exchanger inside your home, where it releases its heat into your central heating system. As it cools, it condenses back into a liquid, passes through an expansion valve to drop its pressure, and the whole cycle starts again.

Four stages. Evaporation, compression, condensation, expansion. Repeating continuously, all winter.

The ratio of heat output to electricity input is called the Coefficient of Performance, or COP. A COP of 3.5 means 3.5 kWh of heat for every 1 kWh of electricity. Over a full heating season, this average is called the Seasonal COP, or SCOP. MCS installation data shows the average installed SCOP for UK heat pumps reached 2.8 in 2023, rising to 3.3 for well-designed systems, according to the Heat Pump Association.

But Will It Actually Heat My House When It's Freezing?

This is the question everyone asks, and it's fair. The idea of extracting heat from -5°C air sounds like a contradiction.

It isn't. The refrigerant boils at -25°C to -40°C. So even when the air outside is well below zero, there's still a temperature difference large enough for the system to work. Performance does drop in extreme cold, a COP of 3.5 at 7°C might fall to 2.5 at -5°C, but it keeps producing heat.

Countries with far harsher winters than Britain rely heavily on heat pumps. Norway has the highest adoption rate in Europe. Finland and Sweden aren't far behind. British winters, where temperatures rarely stay below -5°C for more than a few days, are well within the operating range of any modern unit.

The key is correct sizing. A system designed for your home's specific heat loss, calculated room by room, will cope comfortably. Problems happen when systems are undersized or poorly installed, not because the technology fails in cold weather.

What Types of Heat Pump Are There?

Four types exist in the UK market. They're not equally relevant.

Air Source Heat Pumps (ASHPs)

This is what 95% of UK residential installations look like, according to the Energy Saving Trust. A box sits outside your home, roughly the size of a large suitcase stood on its end. It draws heat from the ambient air and feeds it into your wet central heating system (radiators or underfloor heating) and your hot water cylinder.

ASHPs are the default choice for most homes because they're the cheapest to install, need no garden excavation, and work with existing heating systems. A typical installation for a three-bedroom semi costs £10,000 to £16,000 before grants. After the Boiler Upgrade Scheme grant of £7,500, the net cost drops to £4,000 to £8,500.

Installation takes two to three days. The outdoor unit needs a clear space with good airflow, usually against an external wall. Planning permission isn't normally required in England and Wales under permitted development rules, provided the unit meets noise limits and you're not in a listed building or conservation area.

Ground Source Heat Pumps (GSHPs)

Instead of pulling heat from the air, a ground source system uses pipes buried in your garden, either horizontally in trenches (about 1.2 metres deep) or vertically in boreholes (up to 100 metres). The ground stays at a steady 8°C to 12°C year-round, so GSHPs deliver more consistent performance and typically achieve higher SCOP ratings than air source models.

The trade-off is cost and disruption. Installations usually range from £20,000 to £35,000 before the BUS grant. You need enough garden space for the ground loop, and the excavation work is significant. GSHPs make most sense for larger properties with high heat demand and the land to accommodate the pipework. The ground loop itself can last over 50 years, which partly offsets the higher upfront cost.

Water Source Heat Pumps

If your property sits next to a river, lake, or large pond, a water source system draws heat from the water body. Rare in practice. You'll need an Environment Agency abstraction licence, and the installation costs are similar to ground source. A handful of UK developments use shared water source systems, but for individual homeowners this is niche.

Air-to-Air Heat Pumps

These heat (and cool) individual rooms using wall-mounted units, like the air conditioning systems you see in hotels abroad. They don't connect to radiators or provide hot water, so they can't replace a boiler. Useful as supplementary heating in specific rooms, but not a whole-house solution and not eligible for the BUS grant.

What Does It Cost to Run?

Here's where the efficiency advantage becomes concrete.

A modern condensing gas boiler runs at about 90% efficiency. For every 1 kWh of gas burned, you get 0.9 kWh of heat. A heat pump with an SCOP of 3.5 delivers 3.5 kWh of heat per 1 kWh of electricity. Electricity costs more per unit than gas (roughly 24.5p versus 6.8p per kWh under the April 2026 Ofgem price cap), but the efficiency multiplier more than compensates.

For a typical three-bedroom home using 12,000 kWh of heat per year:

At an SCOP of 3.5, the heat pump is already cheaper to run. At 3.0, it's roughly level. The gap widens further if you generate some of your own electricity with solar panels or use a time-of-use tariff to run the heat pump on cheaper overnight rates.

For a full breakdown of installation costs, grants and payback periods, see our dedicated guide to heat pump costs.

Is It Worth It?

The honest answer depends on what you're replacing and how well your home retains heat.

A heat pump is a strong choice if your home has reasonable insulation (an EPC rating of D or above), space for an outdoor unit, and a wet central heating system. If you're replacing an old gas boiler, you'll cut carbon emissions by around 40% according to the Energy Saving Trust, and running costs should be similar or lower.

If you're replacing oil or LPG heating, the case is stronger still. Those fuels cost significantly more per kWh than gas, so the savings are larger.

A heat pump may not suit every situation. Flats with no outdoor space, listed buildings where external units aren't permitted, or properties with very poor insulation and single glazing might need other measures first. In those cases, insulating the property before installing a heat pump gives you the best performance and lowest running costs.

You don't need underfloor heating. Many homes run heat pumps perfectly well with standard radiators. In some cases a few radiators need upsizing to work at the lower flow temperatures a heat pump prefers, but a good installer will calculate this room by room and tell you exactly what's needed. See our guide to the best heat pump brands for models that perform well at higher flow temperatures.

Grants and Funding

The Boiler Upgrade Scheme offers up to £7,500 towards an air source or ground source heat pump in England and Wales. Your MCS-certified installer applies the grant directly, so you never pay the full price upfront. The scheme has processed over 100,000 vouchers since its 2022 launch, per GOV.UK data.

Scotland has its own Home Energy Scotland grant and loan scheme offering similar support.

Open the eligibility checker. Two minutes. You'll know exactly which grants apply to your home.