Tankless Water Heater Installation Cost

Want to know about tankless water heater costs in 2026?

Tankless water heaters are also known as instantaneous or on-demand hot water systems. As they don’t have tanks, there’s no water storage. You get hot water as soon as you turn on the tap, and it never runs out.

The benefits of a tankless system are that it saves space, so it's ideal for small properties. Plus, because electricity isn’t being used to reheat water in a tank, it is also more energy efficient.

The cost to buy and install a tankless system depends on the number of water heaters you have in your home, the type of heater (gas or electric), but the average cost for a tankless water heater is between £200 and £1,500, and the average labour cost ranges from £240 to £500.

In this guide, we’ll tell you what you need to know about the cost of tankless water heater installation, the additional costs you need to consider, labour costs and timescales and how to find a reliable professional to install your system.

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How Much is Tankless Water Heater Installation?

The cost of a tankless water heater installation depends on whether you are installing a new system or replacing an old one, and whether it is powered with electric or gas.

Your location will also have a bearing on cost. London and the South East are more expensive than other parts of the UK. You should expect to pay more for the services of an electrician or plumber as their hourly rates are higher.

The average cost for:

• Replacing an old tankless water heater: £1080 - £1,450
• Installing a completely new system: £1,450 - £2,000

Replacing a like-for-like heater is often cheaper because the circuit, wiring and venting are already in place. Costs will rise if you need upgraded electrics.

Tankless Water Heater Installation Prices

If you are installing a tankless water heating system in a larger property, you may need more than one unit. In this case, you might have a unit for the bathroom and a separate unit for the kitchen.

The costs in this case are likely to double. This is because each unit needs individual pipework or wiring.

What are the Supply Costs of a Tankless Water Heater?

Tankless water heaters are available to suit most budgets. Cheaper tankless heaters tend to be electric and are used for sinks and showers. They cost less than a heater designed to supply hot water for the whole house.

Gas heaters tend to cost more than electric ones. This is because they are a more complex build, with a higher hot water output.

When you are looking to buy a tankless heater, take into consideration the size of your home and the amount of hot water you generally use. More expensive heaters have features including Wi-Fi connectivity and Smart Controls. They handle simultaneous usage and are often made with better quality materials, resulting in a longer lifespan.

Average Supply Costs For an Electric Tankless Water Heater

Average Heater Prices:

• Electric Mini Heater – Under sink - £150 - £300
• Electric Compact Heater – Shower/Bath - £300 - £500
• Electric Whole House Heater - £500 - £1,500
• Natural or LPG Gas Heater - £350 - £1,000

Electric Tankless Heaters:

Gas Tankless Heaters

Additional Costs

If you consider additional costs for a new tankless heater, there won’t be any unpleasant surprises. Here are the average costs of some of the things you might want to add to your budget:

• Removal and disposal of an old heater or cylinder - £100 - £250
• Upgrading electrics - £100 - £300
• Scaffolding (if the unit is outdoors at a height) - £80 - £100 for a week’s hire
• Aesthetics – Making good, boxing in, plastering, replacing tiles and re-decorating - £50 - £200 depending on the amount of work and the tradesperson you are using
• Reinforcement – Works may be needed to reinforce the area where the heater is located - £50 - £100
• Adding smart controls - £100 - £300

Average hourly rates are:

• Tiler: £20 -£25
• Plasterer - £22.50 - £31.00
• Painter and Decorator - £19 - £25
• Handyperson - £20 - £30
• Builder - £25 - £40

These rates are likely to be higher in London and the South East of England.

Other additional costs to consider are the payment for a maintenance or service plan, which you might want to consider with a gas appliance. Regular maintenance will help the system work efficiently and prolong its lifespan.

Labour Costs and Timescales

A tankless water heater can be installed by:

• An electrician - £50 - £60 an hour (£80 or more in London)
• A plumber - £60 - £75 an hour (£80 -£100 in London)
• Gas engineer - £30 - £50 an hour

Typical Timescales and Labour Costs

Cost Factors for Tankless Water Heater Installation

Cost factors include:

Gas v Electric– A gas tankless water heater needs specialist installation because it is more complex than an electric heater and therefore costs more in labour and materials.

The condition of the existing plumbing or electrics – If wiring or pipework is in place and can be reused, then this will save money. To lay new pipework means more money in materials and labour.

The size and flow rate of the unit – Cheaper units have lower flow rates. This means that you will be unlikely to use more than one or two outlets at the same time. For example, having a shower while running the washing machine.

More expensive units have a higher flow rate and provide hot water from more than one outlet at the same time. The impact on cost is reflected in the price of the water heater and in any electricity or gas upgrades you may need to manage the system.

Indoor or outdoor placement- Indoor placement is usually a cheaper option, unless the location you choose is hard to access. Outdoor placement will need extras such as weatherproofing, fixing a mounting bracket and possibly, the hire of scaffolding if the unit is to be placed at height.

Upgrades - It may be that upgrades are needed, which will add to the cost of the installation, especially if you have a home with older electrics. Typical upgrades include the installation of a new consumer unit (fuse box) or adjusting old pipework for a gas supply.

Building Regulations Tankless Water Heater Installation

A gas tankless water heater should be installed by a professional who is registered under an approved Gas Safe scheme. Building regulations include rules on the installation of vents and flues, condense and gas pipes.

Installing an electric tankless water heater doesn’t need to be signed off by a registered electrician, but if you are having upgrades such as a new consumer unit or a new circuit, then you will need a Part P registered electrician and the work must be signed off and certificated.

Types of Tankless Water Heaters

Tankless water heater costs can differ wildly depending on which model you choose. Are you looking at a gas tankless model, a propane model, or an electric one? Then there's the capacity and features to think about.

Electric tankless water heaters have a lot of fans due to their on-demand heating, the fact that they're energy efficient, and take up next to no space. Plus, they're often a breeze to install & can be a pretty great solution for getting hot water all around the house.

Some tankless water heaters are set up to just heat up one spot or appliance at a time - e.g., a single bathroom or kitchen - while others are built to keep the whole house warm & happy.

Different tankless units come with their own set of quirks: unique features, unique venting requirements, and varying maintenance demands. So you've got to take these factors into account when making up your mind.

Before you choose your tankless water heater, compare the types available and the pros and cons of each one:

Electric Tankless Water Heater

Ideal for small properties which lack space for a traditional tank.

Pros:

• ✔ Cheaper to install than gas
• ✔ Excellent Energy efficiency
• ✔ Longer lifespan than a traditional tank because the system has fewer components

Cons:

• ✖ May need electrical upgrades before installation
• ✖ No hot water during a power outage
• ✖ A larger home will need a more expensive tank, or more than one tank, to provide water from multiple outlets at the same time

Gas Tankless Hot Water Heater

Gas tankless heaters are often recommended for larger homes where families use hot water simultaneously.

Pros:

• ✔ Higher flow rates provide hot water easily from more than one outlet at the same time
• ✔ Better at heating water to the desired temperature in cold weather
• ✔ Hot water even if there’s no electricity

Cons:

• ✖ Installation costs are higher than those of electric heaters because of extras like vents and flues
• ✖ May need to upgrade pipework
• ✖ Must be installed by a Gas Safe engineer

Condensing Tankless Water Heaters

A condensing water heater has an extra heat exchanger. When energy comes from the flue, the second heat exchanger captures it, rather than letting it escape, and converts it into heat. This means the system works more efficiently because it reduces heat loss.

Pros:

• ✔ Reduced running costs
• ✔ More efficient use of heat
• ✔ Higher flow rate

Cons:

• ✖ More expensive to buy than a non-condensing model
• ✖ More complex to install

Non-Condensing Tankless Water Heaters

Non-condensing water heaters only have one heat exchange, so heat is lost when it escapes from the flue into the atmosphere, reducing the efficiency of the unit.

Pros:

• ✔ Cheaper than condensing units
• ✔ Less maintenance required
• ✔ Easier installation

Cons:

• ✖ Less efficient than the condensing model
• ✖ Higher running costs

Alternative Types of Water Heating Systems

Traditional storage tank water Heaters are by far the most common choice, storing hot water for the whole household to use all day long.

Heat pump water heaters use electricity to pull heat from the air or the ground to heat water, giving them a much better energy rating.

Solar water heaters take their power from the sun to heat up the water, making them an environmentally friendly option all round. Solar tankless water heaters, which really make the most of solar power and heat on demand, are especially handy if you live in a very sunny, warm place.

Tankless water heaters, also just called instant water heaters, provide your household with however much hot water you need, right when you need it, meaning you're always got a steady supply on tap. This saves energy and tidies up your bathroom, making it especially suited for residential use.

If you decide you want an alternative to a tankless water heater, these are the alternatives you can consider:

Combi Boilers

Combi boilers are very common in UK homes. They provide hot water and heating without the need for a hot water tank or a cylinder. Average cost to supply and install - £2,600

Pros:

• ✔ Instant hot water and heat
• ✔ Easy to install
• ✔ Energy efficient

Cons:

• ✖ Flow rate is reduced when two or more outlets are used at the same time
• ✖ Can’t combine with solar heating systems

Regular Boilers

Regular boilers use a storage tank, which is usually in the loft and a hot water cylinder. They are suited to homes with low water pressure because the water is supplied using gravity rather than pressure.

Pros:

• ✔ High flow rates
• ✔ Ideal with large households
• ✔ Works with solar heating systems

Cons:

• ✖ You may need to wait for the hot water to heat up if it has been used
• ✖ You need space for the cylinder and cold-water tank. Average cost to supply and install - £2,200

System Boilers

System boilers are similar to regular boilers, but they take cold water from the mains, where it is stored and heated in a hot water cylinder. Average cost to supply and install - £3,150

Pros:

• ✔ Ideal for large families
• ✔ No need for a cold-water tank
• ✔ System boilers combine well with underfloor heating

Cons:

• ✖ Maybe wait for hot water if the water in the cylinder has been used
• ✖ Space needed for the water cylinder
• ✖ If you have low pressure from the mains, your flow rate won’t be ideal

Solar Water Heating

Solar water heating systems use solar panels on your roof and a water cylinder. The sun heats up the solar panels, which then heat the water in the cylinder. Average Cost to supply and install - £5,000.

Pros:

• ✔ Can reduce your monthly fuel bills by between £10 and £20
• ✔ Ideal if you want to reduce your carbon footprint
• ✔ Low-maintenance water heating option

Cons:

• ✖ May be more expensive to install than a traditional hot water system
• ✖ Likely to need another form of heating your water during the winter

Heat Pump Water Heaters

A heat pump water heater takes air from the outside and uses electricity to heat it up, and then transfers it to a hot water cylinder. Average cost to supply and install a heat pump water heater - £8,000.

Pros:

• ✔ Energy efficient -reduced fuel bills
• ✔ Long lifespan (between 12 and 15 years)
• ✔ Reduced carbon footprint

Cons:

• ✖ Expensive upfront costs
• ✖ Takes more time to heat water than other conventional systems
• ✖ Needs space and outside wall for installation

Hiring Contractors Checklist for Kitchen Wrapping

Installing a tankless hot water system may require upgrades to your electrical or gas system. It’s therefore important to use a professional with either Gas Safe or Part P registration. This will ensure the work is completed according to the standards of UK building regulations.

• Confirm the installer has the appropriate registration (Part P for electrics and Gas Safe for gas tankless water heaters)
• Obtain at least 3 quotes and compare each one – include any extras like upgrades if necessary, and whether or not the removal and disposal of any old units is included
• Check reviews from previous customers
• Ask about timescales – start dates and approximate time needed to complete the job
• Verify warranties and workmanship guarantees

Removing Existing Water Heaters: Considerations and Costs

If you have an old system that needs removing, the costs will depend on a variety of factors, including:

• Whether or not the appliance is gas or electric
• The location of the unit and whether it is easy to access
• Whether the appliance can be disposed of easily or needs a special collection

FAQs