Heat Pump for a Terraced House

Heat Pumps in Terraced Houses: Often Easier Than You Think

If you live in a terrace and you're wondering whether a heat pump is viable, here's some good news: mid-terraced houses are actually among the most heat-pump-friendly homes in the UK. The reason comes down to basic physics: your neighbours are doing a lot of the insulation work for you.

Mid-Terrace vs End-of-Terrace: The Difference Matters

A mid-terrace only has two exposed external walls (front and back). The party walls on either side lose very little heat because they adjoin other heated homes. As a result, a typical mid-terrace loses 8,000–13,000 kWh of heat per year, meaningfully less than a semi-detached or detached of the same era.

An end-of-terrace has one more exposed side wall, bumping heat loss up to 10,000–16,000 kWh/yr, still manageable, but worth factoring into your system size.

Most mid-terraces need a 6–8kW heat pump. End-of-terrace properties typically sit in the 7–10kW range. These are not large, expensive systems.

The Outdoor Unit: Where Does It Go?

This is the question everyone with a terraced house asks, and it's a fair one. You can't just plonk a box on the front of your house (well, you technically can, but planning may object). The typical solutions:

• Rear garden: the most common option. Ground-mounted on a plinth in the back garden, running pipework through the rear wall. Works well if you have even a modest outside space.
• Side passage: if you have a side alley, that's ideal. The unit is out of sight and the pipework run is short.
• Front of house: usually permitted development unless you're in a conservation area, but think about how it looks and whether access for maintenance is easy.
• Rear yard/courtyard: even a small paved yard works. The unit needs airflow around it, but the footprint is modest (roughly the size of a large washing machine).

The key requirement is that the unit needs clear airflow. Don't box it in. And it needs to be accessible for the annual service. Beyond that, there's a lot of flexibility.

Noise and Your Neighbours

In a terrace, you're closer to your neighbours than in a detached house, so noise is worth thinking about. The permitted development rules in England (the General Permitted Development Order, Schedule 2, Part 14, Class G) make it a condition that the installation meets the MCS Planning Standards, specifically MCS 020 a, the air source heat pump sound calculation for permitted development installations. Your installer runs that calculation for the exact unit, in the exact position, against your nearest neighbour's habitable-room window. If it doesn't pass, it isn't permitted development and you're into a planning application.

The practical version: ask each installer for the sound power level (LwA) of the unit they're quoting and for the completed MCS 020 calculation. Sound power is the figure the calculation uses and the only one comparable between brands. Manufacturers love quoting sound pressure at some flattering distance instead, which is a different and smaller number. An installer who can't produce the LwA and the calculation is not the installer you want next to a party wall.

Quieter models worth asking about:

• Vaillant aroTHERM plus: Quiet Mark certified, and Vaillant advertises 44 dB(A) for the 3.5kW model. Its own ErP data sheets put sound power across the range at 51 to 60 dB(A), so ask for the figure for your size
• Mitsubishi Ecodan: publishes 40 to 58 dB(A) sound power across the range, model dependent, which at the top end is the quieter of the two
• Daikin Altherma 3: compact, which helps when the only spot is a narrow side passage. Daikin keeps the acoustic figures in the technical data sheets rather than on the website, so ask

Do You Need to Insulate First?

It depends. If your terrace was built after the 1920s, you probably have cavity walls that can be filled, a straightforward job, though not as cheap as people expect. The Energy Saving Trust puts cavity wall insulation at around £2,200 for a typical Great Britain home (around £1,000 in Northern Ireland). That's a single figure for a typical house, not a per-house-type table: a mid-terrace with only two exposed walls to drill will come in under it, which is the one bit of good news about having neighbours on both sides. If it's a Victorian terrace with solid walls, see our Victorian house guide for the fuller picture on wall insulation.

For most post-war terraces with cavity walls:

• Cavity wall insulation: around £2,200, less on a mid-terrace (Energy Saving Trust)
• Loft insulation, bare to 270mm: £750 (Energy Saving Trust). A top-up from 120mm is about £600 and saves a lot less, around £17 a year
• Draught-proofing: saves about £55 a year professionally done, plus £45 for blocking an unused chimney (Energy Saving Trust)

After that prep work, your heat loss drops enough that the heat pump can run efficiently. Don't skip it to save money upfront. You'll pay more in running costs.

Radiators: Check Before You Assume

Many terraced houses already have reasonably sized radiators, especially if they've had a boiler replacement in the last 10 years and the engineer upsized things. Get your installer to do a room-by-room heat loss assessment. Some rooms may need bigger radiators; others might be fine as-is. Budget £800–2,000 for radiator upgrades if needed, but you might get away with less.

Planning Permission

In most cases, a heat pump in a terraced house is permitted development. You don't need to apply for planning permission. The conditions are that it's not on a wall or roof facing a highway, and the noise limits are met. Conservation areas and listed buildings are exceptions. Check with your local planning authority if you're in one.

What It All Costs

The heat pump line is £9,000 to £13,000 installed throughout (the Energy Saving Trust puts a typical air source install at around £12,000). For a post-war mid-terrace that's already insulated, the grant takes the net cost down to £1,500 to £5,500, which is the cheapest heat pump job in the UK housing stock outside a bungalow. You'll see claims of people paying a few hundred pounds net. Treat those as outliers with an unusually cheap quote rather than the number to budget for.

Running Costs

Take a well-insulated mid-terrace: 8,000 to 11,000 kWh of space heating plus about 2,000 kWh of hot water, so 10,000 to 13,000 kWh of heat a year. We've used a SCOP of 3.4, which is what the calculator at the top of this page is pre-set to for a terrace. The heat demand figures here are typical ranges for this kind of house, not a measurement of yours. Only a room-by-room MCS heat loss calculation settles it, and the gap between the two ends of the range is worth a few hundred pounds a year.

• Heat pump: 2,940 to 3,820 kWh of electricity at 26.32p = £780 to £1,010 a year
• 90% gas boiler: 11,100 to 14,400 kWh of gas at 7.97p = £890 to £1,150, plus £108 of gas standing charge = £990 to £1,260 a year

So you're about £220 to £250 a year better off, and £108 of that is the gas standing charge you stop paying once the meter comes out. If you keep the gas on for a hob, you only get the fuel saving, which is more like £110 to £140. Worth knowing before you keep the gas for the sake of one appliance.

This is a recent reversal. Under the July 2026 cap gas was the cheaper fuel. The October 2026 cap put gas up 8.7% and electricity up 0.8%, and took VAT off electricity until 31 March 2027, which put the heat pump in front. Break-even against a 90% gas boiler is a SCOP of 2.97, so a badly commissioned system running hot can still lose.

The Bottom Line

Terraced houses, particularly mid-terraces, are genuinely well-suited to heat pumps. The shared walls cut heat loss, the system sizes are modest, and the costs are manageable, especially after the Boiler Upgrade Scheme grant. If your walls are already insulated and your loft is topped up, you might need very little prep work before installation.

Read more: How the Boiler Upgrade Scheme grant works | Full heat pump cost breakdown | Heat pump running costs explained