Mind the Gap: Ensuring heat policy reaches space-constrained homes

Insights for local authorities

This report shines a light on an estimated 1.8 million properties that are at risk of falling into the “heat gap” between individual heat pumps and a large-scale heat network.

These homes are typically terraced properties or flats with little or no external space that make individual air source heat pumps impractical. At the same time, they may be located in an area not commercially-viable for a heat network. As a result, they fall between the two dominant heat decarbonisation policies, with no clear low-carbon pathway available.

Many “heat gap” homes risk being stranded on high-carbon, increasingly expensive heating systems, which is especially concerning because space-constrained homes are often found in communities with higher levels of deprivation and fuel poverty. These residents face rising bills and deepening inequalities.

The report offers three clear steps forward. It supports the development of a national methodology to define, map and quantify these “heat gap” homes which would help councils develop local heat strategies that ensure no communities are left out.

The report also advocates for the funding of large-scale pilots to help develop scalable, repeatable models. It uses a number of real-world case studies to show that the technologies already exist to serve space-constrained homes. If paired with effective delivery models and strong resident engagement, they could provide low-carbon heat where individual heat pumps are not possible.

Lastly, the report identifies several near-term policy levers that could help close the heat gap today. These include broadening eligibility for grants so more residents can benefit from them, reforming levies to reduce electricity bills, and revising regulations around communal heating projects.

The report shows that the “heat gap” is a critical piece of the just-transition puzzle. By addressing it, national and local governments can accelerate progress, reduce fuel poverty, and ensure the shift to low-carbon heat genuinely reaches every home.

Key findings

• Around 1.8 million space-constrained homes fall outside current heat pump and heat network policies, creating a significant heat-decarbonisation gap.
• Clear identification and mapping of “heat gap” homes would support targeted, place-based planning and allow more residents and communities to benefit.
• A mix of new technologies and delivery models, supported by adjusted policy levers, would provide viable low-carbon options for space-constrained homes.