Energy Grants for First-Time Buyers: Upgrade Your New Home for Less

Energy grants first time buyers should know about can save thousands of pounds on upgrading a new home. Buying your first property is exciting but expensive, and older homes often come with high energy bills that stretch already tight budgets. The good news is that multiple government grants, tax reliefs and financing products exist specifically to help you improve your home’s energy efficiency without breaking the bank. This guide maps out every option available in 2026 and shows you how to combine them for maximum benefit.

What Energy Grants Can First-Time Buyers Get?

First-time buyers in the UK can access several energy grants and schemes to upgrade their new home for less. Eligibility depends on your income, benefits status and the property’s current EPC rating rather than whether you are a first-time buyer specifically.

• Boiler Upgrade Scheme: £7,500 towards a heat pump in England and Wales, with no income test
• Warm Homes: Local Grant: council-run grants in England for homes rated EPC D to G where household income is £36,000 or less, someone gets a means-tested benefit, or the home is in an eligible postcode; caps of £16,600 for energy efficiency plus £16,600 for low-carbon heating
• ECO4 Scheme: energy suppliers can fund insulation and heating for households on qualifying benefits, but it ends on 31 December 2026
• Warm Homes Loan Scheme: lower-rate loans from participating lenders for solar panels, batteries and heat pumps, from September 2026
• Green mortgages: some lenders offer better rates or cashback on energy-efficient homes, or extra borrowing for upgrades
• 0% VAT on energy efficiency products: no VAT on insulation, heat pumps and solar panels until 31 March 2027

If you have just purchased a home with an EPC rating of D or below, you are well placed to benefit from several schemes. Start by ordering a new EPC assessment: it costs around £60 to £120 (EPC survey costs) and identifies which measures will have the greatest impact on your energy bills.

Why Energy Efficiency Should Be a Priority for First-Time Buyers

When you are stretching to afford a deposit and manage mortgage payments, energy efficiency might feel like a luxury. It is anything but. An energy-inefficient home costs significantly more to run, and those costs are permanent until you address them.

Every EPC estimates a home’s energy costs and what each recommended improvement would save, so compare those figures on the EPCs of homes you’re considering. For context, here are the rates under the October–December 2026 price cap (Ofgem):

Improving a home’s rating cuts that bill, and acting early, ideally within the first year of ownership, means you start saving sooner. How much you save depends on the home and your usage, which is why the EPC’s own estimates are the place to start.

Beyond running costs, a better EPC rating can help when you come to sell or remortgage, especially with lenders that offer green mortgages.

The Boiler Upgrade Scheme: Up to £7,500 for a Heat Pump

The Boiler Upgrade Scheme (BUS) provides upfront grants towards replacing fossil fuel heating systems with heat pumps. As a first-time buyer, you can apply as soon as you complete on your purchase.

• Grant amount: £7,500 for an air source or ground source heat pump (£9,000 until 31 March 2027 if the home is heated by oil or LPG and has no mains gas), £5,000 for a biomass boiler in a rural home off the gas grid, and £2,500 for an air-to-air heat pump
• Who qualifies: Any owner of a home in England or Wales that is replacing fossil fuel heating (gas, oil, electric or LPG). There is no means test, and since April 2026 an EPC isn’t strictly required: your installer can use other evidence
• How it works: Your chosen MCS-certified installer applies for the voucher on your behalf, and the grant comes off the price you pay
• Typical cost after grant: Our modelled typical cost for an air source heat pump is £10,684 installed (heat pump costs), so the £7,500 grant leaves about £3,184

For a first-time buyer moving into a home with an old gas boiler, the BUS grant brings a heat pump close to the price of a new boiler. How quickly it pays back depends on the home’s insulation and your tariff, so don’t count on a fast payback.

Warm Homes: Local Grant of up to £16,600 plus £16,600

If your new home in England is rated EPC D to G, the Warm Homes: Local Grant, run by councils under the Warm Homes Plan, can pay for upgrades when your household income is £36,000 or less, you live in an eligible postcode, or someone in the household gets one of these means-tested benefits (DESNZ guidance):

• Universal Credit
• Pension Credit (Guarantee or Savings Credit)
• Income Support
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Housing Benefit

Grants are capped at £16,600 for energy efficiency work, including insulation (loft, cavity wall, solid wall, underfloor), heating controls, solar panels and batteries, plus £16,600 for low-carbon heating such as a heat pump. Gas and oil boilers aren’t funded. For an owner-occupier the work is free.

Insulation after the Great British Insulation Scheme

The Great British Insulation Scheme closed on 31 March 2026 (GOV.UK). If you’ve bought an older home, these are the routes to cheaper insulation now:

• Warm Homes: Local Grant (England): free for eligible households, as above
• ECO4: for households on qualifying benefits, until 31 December 2026
• Paying yourself: insulation carries 0% VAT until 31 March 2027

Loft and cavity wall insulation is usually one of the cheapest upgrades in an older home: our modelled typical cost for both on a three-bedroom semi, based on Energy Saving Trust installed prices, is £2,950 (insulation costs).

0% VAT on Energy Efficiency Products

Qualifying energy efficiency installations in homes are zero-rated for VAT until 31 March 2027, when the rate is due to return to 5% (HMRC). Zero-rated measures include:

• Heat pumps (air source, ground source, water source)
• Solar panels and battery storage
• All types of insulation
• Draught stripping
• Heating controls and smart thermostats
• Wood-fuelled (biomass) boilers
• Not included: glazing, gas boilers, EV chargers and ventilation systems such as MVHR

The 0% VAT applies to supply and installation combined. On a £6,000 solar panel system, the saving compared with the 5% rate is £300.

Green Mortgages: Lower Rates for Energy-Efficient Homes

Several major UK lenders offer green mortgage products with preferential rates for energy-efficient properties. As a first-time buyer, you can benefit in two ways:

Buying an efficient property: If you buy a home already rated EPC A or B, some lenders offer a lower rate or cashback on a green mortgage. Compare the deal as a whole, not just the green discount.

Improving a property you buy: Some lenders offer extra borrowing for energy efficiency improvements, and the government’s Warm Homes Loan Scheme is designed to lower the rate on loans for solar panels, batteries and heat pumps from participating lenders (GOV.UK).

Even a small rate cut adds up over a 25-year mortgage. Combined with energy bill savings and the value of a better EPC when you sell, the financial case for energy efficiency is strong.

How to Combine Grants for Maximum Savings

Stack schemes where the rules allow. Here is an example for a first-time buyer purchasing a 1970s three-bedroom semi-detached house rated EPC D, using our modelled typical costs, for a household that doesn’t qualify for the Local Grant:

How far this lifts the EPC, and what it saves each year, depends on the house; the new EPC after the work will show the change, and a better rating may help you get a green mortgage deal when you remortgage.

If the household qualifies for the Warm Homes: Local Grant, all three measures could be funded within its caps (the heat pump from the £16,600 low-carbon heating pot instead of BUS, since the two can’t both pay for it), and an owner-occupier would pay nothing.

What to Check Before You Buy

As a first-time buyer, looking at a property’s energy efficiency before you commit can save you significant money:

• Check the EPC: Every property for sale must have a valid EPC. Read it carefully, paying attention to the current rating, potential rating, and the recommended improvements. The estimated costs and savings for each improvement are listed
• Look at the construction: Cavity walls (post-1930s) are much cheaper to insulate than solid walls (pre-1930s). A home with unfilled cavities represents an easy, cheap improvement (and a free one if you qualify for the Local Grant)
• Check the heating system: A modern condensing boiler suggests lower immediate costs. An old back boiler or G-rated system suggests significant savings from replacement
• Assess glazing: Original single-glazed windows indicate double glazing will be needed, but also represent a significant potential improvement
• Consider the roof: Check whether the loft is already insulated and to what depth. Topping up from 100mm to 300mm is cheap and effective

To see which grants fit a specific property, try our grant checker. Once you own it, you can request a free quote: up to three approved installers who cover your area may contact you. No charge, no obligation.

Frequently Asked Questions for First-Time Buyers

Can I apply for energy grants before I complete on my purchase?

Most grant schemes require you to be the legal owner of the property before you can apply. You cannot apply for the BUS grant or the Warm Homes: Local Grant before completion. However, you can research eligibility and line up installers in advance so that applications can go in as soon as you own the property. For the Local Grant, you should usually hear from your council within 10 working days of applying about arranging a survey (GOV.UK), though some councils have already committed this year’s funding.

Should I buy a property with a low EPC rating to take advantage of grants?

A low EPC rating is not necessarily a negative if the improvements are straightforward. A property rated EPC E with unfilled cavities and no loft insulation can often be improved to EPC C for little cost, and free if you qualify for the Warm Homes: Local Grant (ECO4 ends on 31 December 2026). However, a property rated E because of solid walls and single glazing will be much more expensive to upgrade. What matters is why the rating is low and what it would cost to improve it. Get an installer assessment before committing.

Do I need to live in the property to claim energy grants?

Most grants require the property to be your main residence. The BUS grant is available for any home you own, including second homes, but the Warm Homes: Local Grant and ECO4 are typically limited to your primary residence. If you are a first-time buyer purchasing your main home, you qualify for all available schemes subject to individual eligibility criteria.

Can I use my Help to Buy ISA or Lifetime ISA savings for energy improvements?

The Help to Buy ISA and Lifetime ISA government bonus can only be used towards the purchase of the property itself, not for improvements after purchase. However, you can use your general savings or additional green mortgage borrowing for energy improvements. Some first-time buyers include the cost of planned improvements in their mortgage application by borrowing slightly more, then using the extra funds for insulation and heating upgrades.

How quickly should I make energy improvements after buying?

Ideally within the first 6 to 12 months. Early action means you start saving on energy bills immediately and benefit from current grant availability and 0% VAT (which ends on 31 March 2027). Some improvements, like loft and cavity wall insulation, can be completed within weeks of moving in with minimal disruption. Larger projects like heat pump installation may take two to three months from initial enquiry to completion. Book an EPC as soon as you move in to get the process started.