Fewer than one in five homes is ready for a heat pump without additional building work, experts have said, as the Government’s grant scheme launches.

About 4.8 million homes could have a heat pump fitted to replace their gas boiler immediately, according to estimates from energy company Octopus, without requiring any additional insulation.

The Government’s boiler upgrade scheme, which launches on Friday, will provide grants of up to £6,000 for households to install a heat pump, which Octopus has said will bring them into price parity with a gas boiler.

With gas prices rising to record levels, using a heat pump is estimated to be around £260 cheaper a year than a traditional boiler.

But households will have to prove they have sufficient loft or cavity wall insulation to be eligible for the scheme, which will mean that millions of homes are left out.

Heat pumps work best when run at a lower temperature to most gas boilers, meaning homes should be well insulated to maximise their efficiency.

Counting the cost of insulation

Industry experts say a further 8.4 million UK homes are suitable for a heat pump with “minimal” changes such as loft and cavity wall insulation, which cost around £800 to £950.

In practice, the grant scheme will only cover around 30,000 installations annually during its three years, well under the number of homes that are “heat pump ready”.

But the Government wants to see 600,000 new heat pumps installed every year from 2028, meaning many households will need to make changes in the future.

The Government scrapped its major scheme to help fund insulation measures, the Green Homes Grant, last year amid stinging criticism of its rollout.

It has since promised to cut VAT on energy efficiency measures, including roof insulation from five to zero per cent, as part of measures to help people save money on energy bills.