The short answer
- An air source heat pump costs less to install, at around £12,000 according to the Energy Saving Trust, and suits most homes.
- A ground source heat pump costs around £15,000 with trenches, and more with a borehole, but is more efficient through the winter.
- Both get the same £7,500 Boiler Upgrade Scheme grant, or £9,000 in oil and LPG homes until 31 March 2027, and 0% VAT.
- Ground source needs room for trenches or access for a drilling rig. Air source only needs space for the outdoor unit.
How each one works
Both types of heat pump move heat from outside into your home, then raise its temperature to heat your radiators and hot water. The difference is where the heat comes from.
An air source heat pump has an outdoor unit with a fan that draws heat from the outside air, even when it's cold. A ground source heat pump collects heat from the ground through a loop of pipe buried in trenches or drilled into a borehole. The heat pump itself sits indoors, often in a utility room or garage.
Side-by-side comparison
| Feature | Air source | Ground source |
|---|---|---|
| Typical installed cost | Around £12,000 | Around £15,000 with trenches, considerably more with a borehole |
| Boiler Upgrade Scheme grant | £7,500 | £7,500 |
| VAT until 31 March 2027 | 0% | 0% |
| Space outside | A spot on the ground or a wall for the outdoor unit | Trenches across a garden or field, or a borehole |
| Efficiency in winter | Good, but falls as the air gets colder | Higher and steadier |
| Noise outside | A fan, kept within MCS noise limits | None |
| Installation | Usually a few days | Groundworks first, then the indoor installation |
| Planning permission | Not needed for most houses | Not needed for houses |
Costs are the Energy Saving Trust's typical figures before the grant. Your price depends on your home's heat demand, the size of heat pump it needs and any changes to radiators or the hot water cylinder.
Efficiency and running costs
The Energy Saving Trust says heat pumps are more than three times as efficient as a gas or oil boiler, because they move heat rather than burning fuel to make it. On a standard electricity tariff, a heat pump can cost slightly more to run than a new gas boiler. On a heat pump tariff, which charges less at certain times of day, it can cost less.
Ground source heat pumps are usually more efficient over a year, because the ground stays at a fairly steady temperature while winter air gets cold. That matters most in homes with a high heat demand, where the saving on every unit of heat adds up.
The biggest saving comes from switching away from LPG, oil or electric heaters, which is why heat pumps are popular in rural homes off the gas grid.
Space and disruption
Air source
The outdoor unit goes on a level base or wall bracket with space around it for air to flow. We position it to meet the MCS sound calculation and keep pipe runs short. Inside, you'll need room for a hot water cylinder, usually in a cupboard of at least 80 cm × 80 cm.
Ground source
Trenches need land near the house that a digger can reach, without trees in the way. For a new three-bedroom house, the Energy Saving Trust suggests two trenches of 30–40 metres. Bigger or less insulated homes need a longer loop.
Where space is tight, a borehole is about 20 cm wide but between 75 and 200 metres deep. The indoor unit measures roughly 120 × 60 × 60 cm and often includes the hot water cylinder.
Radiators and hot water
Heat pumps work best at lower flow temperatures than a boiler, so rooms are heated by slightly larger radiators running warm rather than hot. Underfloor heating suits both types well.
Our room-by-room heat loss calculation shows which radiators are already big enough and which need upgrading. Many homes only need a few changed. A heat pump doesn't heat water on demand like a combi boiler, so you'll need a hot water cylinder with either type.
Which is right for your home
An air source heat pump is the best fit for most homes, including terraces, semis and homes with small gardens. It's cheaper to install, quick to fit and qualifies for the same grant.
A ground source heat pump makes sense for larger homes with a high heat demand, rural properties with a paddock or large garden, new builds where groundworks are happening anyway, and anyone who'd rather not have an outdoor unit.
We install both, so we'll recommend whichever suits your home and budget after the survey. See our heat pump installation page, or read how the Boiler Upgrade Scheme grant works.
Common questions
Is a ground source heat pump worth the extra cost?
It can be if your home has a high heat demand, you have the land for trenches and you plan to stay for many years, because the higher efficiency lowers running costs over time. For most homes with average heat demand, an air source heat pump gives a quicker payback.
Can I have a heat pump if I only have a small garden?
Usually, yes. An air source heat pump only needs a spot on the ground or a wall with space around it for airflow. Ground source is still possible on a small plot with a borehole, but the drilling makes it considerably more expensive.
Do heat pumps work in a cold winter?
Yes. We size every system from a room-by-room heat loss calculation based on the coldest weather expected in your area, so your home stays warm on the coldest days. Ground source holds its efficiency better in cold weather because the ground stays at a steadier temperature than the air.