In May 2025, the UK government implemented sweeping planning permission reforms as part of its Warm Homes Plan, significantly reducing red tape associated with air-source heat pump (ASHP) installations.

Unlocking Growth: Planning Relaxations Drive Heat Pump Uptake

Key regulatory changes include:

Removal of the one-metre boundary rule—installations no longer need planning permission if placed closer than one metre to property lines pv magazine International The Renewable Energy Institute The Times.
Larger units permitted—maximum allowed volume increased from 0.6 m³ to 1.5 m³ calibreclimate.com SGS Heating & Electrical.
Double units now allowed—detached homes can install up to two heat pumps under permitted development rights, supporting cascade systems for more efficient heating and cooling navien.co.uk calibreclimate.com.
Air-to-air systems legalised—systems providing both heating and cooling now qualify for permitted development, widening their applicability calibreclimate.com SGS Heating & Electrical.

These reforms have delivered immediate results. The number of Boiler Upgrade Scheme (BUS) grant applications soared by 54% in the first half of 2025 compared to the same period in 2024 Homebuilding+1. In June alone, 3,715 applications were filed—up from 2,687 a year earlier Homebuilding. These figures put the UK firmly on track to meet its goal of 600,000 heat pump installations per year by 2028 Homebuilding.

However, uptake is still uneven. Despite the grant availability of up to £7,500, many homeowners find the process daunting due to paperwork, eligibility hurdles, and upfront costs, which often exceed £1,000 even before installation begins Homebuilding.

What This Means for Property Developers & Renovators

These regulatory shifts are particularly impactful for developers and renovators:

1. Reduced Project Delays & Planning Friction

With planning hurdles significantly lowered, incorporating heat pump systems into renovation and redevelopment schemes is faster and less bureaucratic, especially in tight urban projects where outdoor space is limited.

2. Better Integration into High-Spec Builds

The authorisation of larger and multiple units lets developers design more efficient, multi-zone heating and cooling systems—well-suited to upscale or complex properties.

3. Added Value in Retrofit and New Build Projects

Retrofitting properties with low-carbon heat solutions significantly boosts energy efficiency, market appeal, and aligns with Future Homes Standard targets—contributes to reducing energy bills and future-proofing assets The Guardian.

4. Competitive Advantage in Pushing Green Credentials

Developers offering heat-pump-equipped homes benefit from strong ESG positioning, appealing to increasingly eco-conscious buyers and local authorities emphasising net-zero standards.

5. Access to Business-Friendly Grants

The £7,500 BUS grant reduces installation costs and improves project feasibility—but navigating bureaucracy remains a challenge, especially for large-scale developers with multiple sites Homebuilding.

Helping Developers Capitalise on These Opportunities

At Onyx Money, we understand how to turn these regulatory shifts into strategic advantages. Here's how we support developers:

Flexible Bridge & Renovation Financing
We offer tailored bridging finance—ideal for funding heat pump installations quickly, ahead of longer-term refinancing.
Covering Upfront Costs
Use specialist loans to bridge immediate outlays—including grant co-funding, installer approvals, and preparatory costs—while you await BUS reimbursements.
Combining Grants with Funding Strategy
Our advisers can structure finance plans that balance grants and loans effectively, ensuring projects stay cashflow-positive.
Supporting Progressive Builds
Whether you’re retrofitting older homes or working on new developments, our funding solutions allow seamless integration of low-carbon technologies like ASHP systems.

Explore our specialist funding options or check out previous insight on renovation finance for energy efficiency to see how we’ve helped developers optimise green investments.

The UK’s planning permission easing for heat pumps unlocks massive potential for developers—by simplifying installation, enhancing system capability, and aligning with future energy standards. As the market responds—evidenced by surging grant applications—it’s clear that low-carbon heating is more than a trend—it’s a strategic differentiator.

By pairing Onyx Money’s agile finance solutions with these regulatory improvements, developers and renovators can deliver better, greener homes—faster and with increased project ROI.