The government's commitment to end new gas boiler installations by 2035 is the most significant structural shift the UK heating industry has faced in a generation. But what most HVAC business owners do not realise is that this policy is driving acquisitions right now, not in nine years' time. The smart money has already moved, and the acquisition window for heat pump-capable businesses is at its most active in the current market.
Understanding why this is happening, and what it means for business owners thinking about their exit, requires looking at the timeline through a buyer's eyes rather than a homeowner's.
The Policy Landscape
The headline commitment is well known: no new gas boilers installed in homes from 2035. Existing gas boilers will not be banned or removed. The restriction applies to new installations only. When a boiler reaches end of life after 2035, it will be replaced with a low-carbon alternative, most likely an air source or ground source heat pump.
But 2035 is not the starting gun. The transition is already well under way. The Future Homes Standard, which applies to all new-build homes from 2025, requires heating systems that produce 75 to 80 per cent less carbon than current standards. In practice, this means new homes cannot be fitted with gas boilers. For HVAC businesses serving housebuilders and developers, this change is not theoretical. It is the reality of their order books today.
The Boiler Upgrade Scheme, which provides grants of up to £7,500 towards heat pump installations for homeowners, is further accelerating the shift. It makes heat pumps financially viable for a segment of homeowners who might otherwise wait. For HVAC businesses with MCS accreditation, this scheme is a direct revenue driver.
Why Buyers Are Moving Now
Here is the critical point that many business owners miss. A buyer who waits until 2033 or 2034 to build heat pump capability will be too late. Building a credible heat pump business takes time. You need MCS-accredited engineers, and achieving MCS accreditation requires documented competence, quality management systems, and a track record of compliant installations. You need established supplier relationships. You need systems for heat loss calculations, system design, and ongoing maintenance. You need a reputation in the market.
It is faster, cheaper, and less risky to acquire an HVAC business that already has heat pump capability than to build it from scratch. That is precisely why PE firms are paying premium multiples for these businesses right now.
This is why the acquisition activity is concentrated in the present, not the future. PE firms and large consolidators are building platforms that will be ready when the transition accelerates. They are buying the capability, the accreditation, the trained engineers, and the customer relationships today, because those assets take years to develop organically.
The Scarcity Premium
At the time of writing, a relatively small proportion of HVAC businesses in the UK have fully made the transition to heat pump installations. Many still operate primarily on gas boiler installation and maintenance. The businesses that have invested in MCS accreditation, trained their engineers in heat pump technology, and built a portfolio of successful installations are in a minority.
That scarcity creates a premium. When something is in short supply and in high demand, the price goes up. HVAC businesses with demonstrated heat pump capability are commanding higher multiples than those without it, because buyers are competing for a limited pool of acquisition targets.
This premium will not last forever. As more businesses make the transition over the next five to seven years, heat pump capability will become standard rather than exceptional. The scarcity premium will normalise. Business owners who sell while capability is still relatively rare may well command higher multiples than those who wait until the market has caught up.
What Buyers Are Looking For
Buyers conducting acquisitions in the current market are assessing several heat pump-specific factors alongside the standard due diligence.
MCS accreditation. This is the gold standard for heat pump installation quality in the UK. Buyers see MCS accreditation as proof that the business meets the required technical and quality standards. Without it, homeowners cannot access the Boiler Upgrade Scheme grants, which limits the addressable market.
Qualified engineers. How many of your engineers are trained and competent in heat pump installation? What qualifications do they hold? Have they completed manufacturer-specific training? A team of engineers with both Gas Safe registration and heat pump competency is exceptionally valuable in the current market.
Installation track record. How many heat pump installations has the business completed? What types (air source, ground source)? What is the customer satisfaction rate? A documented track record of successful installations is far more convincing than theoretical capability.
Mixed revenue profile. The most attractive businesses in the current market are those with a balanced revenue mix: gas boiler maintenance (providing stable recurring income today), heat pump installation (providing growth potential tomorrow), and general HVAC services (commercial ventilation, air conditioning) providing diversification.
The Numbers in Context
The HVAC acquisition market has been active for several years, but the pace has accelerated noticeably since the Future Homes Standard was confirmed. Over 200 HVAC-related acquisitions were completed in the UK in 2024 alone, with a significant proportion driven by heat pump capability.
PE firms are not acquiring single businesses in isolation. They are executing buy-and-build strategies, assembling platforms of 10, 20, or more HVAC businesses to create regional or national scale. For these buyers, each acquisition that adds heat pump capability strengthens the platform's position for the coming transition.
What This Means for Owners
If your HVAC business already has MCS accreditation and a track record of heat pump installations, your business may be more valuable today than it will be in five years. The scarcity premium is real, and it is available now. That does not mean you should rush to sell. A well-prepared business with strong fundamentals will always command a fair price. But it does mean that the timing question deserves serious consideration.
If your business has not yet made the transition, that does not disqualify you from the market. Gas boiler maintenance will remain a significant revenue stream for many years to come, and businesses with strong contract books and qualified Gas Safe engineers are still attractive acquisition targets. But the premium that heat pump capability commands is a material differentiator in the current market.
Whether you are actively considering a sale or simply want to understand how the transition affects your business value, it is a conversation worth having. We work exclusively in the HVAC sector and understand how these dynamics play out in real valuations and real transactions.
