Heat network exemptions: HMOs and the 45 kW rule

What the regulations say

Regulation 13(2) of the Heat Networks (Market Framework) (Great Britain) Regulations 2025 says operating or supplying a heat network is not a regulated activity if:

• the heat network only serves a single house in multiple occupation; or
• the heat network only serves a single converted building and has no more than one source appliance, with a capacity of no more than 45 kilowatts thermal.

Exemption 1: a single house in multiple occupation

For this exemption, a house in multiple occupation (HMO) means a building or part of a building within paragraphs (a) to (d) of section 254(1) of the Housing Act 2004. That covers the standard test, the self-contained flat test, the converted building test and HMO declarations. A typical example is a shared house where residents share a kitchen or bathroom.

It does not include paragraph (e): converted blocks of self-contained flats under section 257 of the Housing Act 2004. So a section 257 block is not covered by this exemption. It may still be exempt under exemption 2.

The network must only serve that one HMO. A system that also serves other buildings is not covered.

Exemption 2: a converted building with one small appliance

The Housing Act 2004 defines a converted building as a building or part of a building consisting of living accommodation in which one or more units of accommodation have been created since the building or part was constructed. A house or office converted into flats is a typical example.

The regulations define a source appliance as an appliance whose main purpose is to heat or cool the liquid or gas distributed in the network, such as a boiler or heat pump. To be exempt, the network must only serve that one converted building and have no more than one source appliance, with a capacity of no more than 45 kW thermal.

• Two boilers, even small ones, means the exemption doesn't apply.
• One appliance above 45 kW means the exemption doesn't apply.
• A purpose-built block of flats is not a converted building, so this exemption doesn't apply to it.

How to check your building

1. Confirm whether one system supplies heating, cooling or hot water to more than one home. If each flat has its own boiler and nothing is shared, there is probably no heat network.
2. Check whether the building was built as flats or converted later.
3. Count the source appliances and find each one's output. It is usually on the appliance's data plate or in its manual, and your heating engineer can confirm it.
4. Write down how you reached your view, with photos of the data plates, and keep it with your building records.
5. Check again whenever the heating system changes. A bigger replacement boiler, or a second appliance, could bring the building into scope.

Questions

Our block only has a shared hot water system. Is it a heat network?

It can be. A heat network can supply heating, cooling or hot water, so a shared hot water system serving several flats can count.

We have 4 flats. Are we too small to be regulated?

There is no exemption based on the number of flats. The two exemptions depend on the type of building and the heating system.

Our converted building has one 40 kW boiler. Are we exempt?

If the network only serves that one converted building and that boiler is its only source appliance, the exemption is likely to apply. Keep a record of how you checked.

We're replacing our boiler. Could that change things?

Yes. If the new boiler is above 45 kW, or you add a second appliance, the exemption would no longer apply.

Sources

• The Heat Networks (Market Framework) (Great Britain) Regulations 2025, regulation 13
• Housing Act 2004, section 254
• Ofgem: Heat networks registration guidance (January 2026)

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