The government has confirmed that all new homes in England from 2028 must install heat pumps as their primary heating system. The Future Homes Standard, published on 24 March 2026, ends gas boiler installations in new builds and sets binding requirements for how developers design residential properties (Mortgage Strategy, 24 March 2026).

For landlords and investors buying new-build stock, the energy profile of these homes will be fundamentally different. What does that cost, and what does it save?

What's Changing

Gas boilers are out. Heat pumps - which move thermal energy from air, ground, or water sources rather than generating heat by combustion - become mandatory for all new homes in England from 2028 (Mortgage Strategy, 24 March 2026).

Most new homes must also install renewable energy generation capacity, typically solar photovoltaic (PV) panels, unless the building presents high fire risk, the roof is unsuitable, or the site receives insufficient sunlight (gov.uk, 24 March 2026). The exception clauses matter for dense urban schemes, but expect them to apply narrowly.

The government claims new buildings under this standard will produce 75% less carbon than homes built to 2013 standards (gov.uk, 24 March 2026). For occupants, the headline saving is £830 per year on energy bills compared to conventionally heated and powered homes (gov.uk, 24 March 2026).

That £830 annual saving flows from heat pump efficiency (typically 3-4 units of heat output per unit of electricity input), solar generation offsetting grid consumption, and improved building fabric (airtightness, wastewater heat recovery). Lower utility bills mean tenants can sustain higher rent levels without strain on their housing cost ratio. If you're acquiring new-build stock, the energy profile directly affects rental yield sustainability.

The Developer Squeeze

Developers face design rework and cost absorption. Heat pump installation, solar deployment, and enhanced airtightness standards all carry upfront capital costs. The transition period before 2028 enforcement is tight for major housebuilders running multiple schemes in pre-planning or early-stage delivery. Any developer still drawing up schemes under old thermal regulations will need to restart.

The government has indicated heat network (district heating) connections are available as an alternative where heat pumps aren't viable, but this applies to relatively few schemes. Most builds will go the heat pump route.

Energy Secretary Ed Miliband framed the changes as reducing reliance on fossil fuel markets (Mortgage Strategy, 24 March 2026). This isn't a pilot. It's the baseline from 2028 onwards.

What Landlords and Investors Should Track

If you're acquiring or planning new-build investments, the energy operating model has shifted permanently. EPC (Energy Performance Certificate) ratings for new stock will be substantially higher than older portfolios. This affects mortgage products, green financing terms, and tenant appeal.

Three questions for your surveyor and acquisitions team: Does solar installation cost remain within your project IRR (Internal Rate of Return) assumptions? Are building fabric standards reflected in construction pricing? Will your lender require EPC ratings on completion, and does it affect loan-to-value (LTV)?

Note: the Future Homes Standard applies to England. Scotland, Wales, and Northern Ireland set their own building regulations separately, though similar direction is expected.