This is part of a £3.9bn plan to provide 90,000 pumps to reduce carbon emissions from heating buildings.
As a result of this investment, the government hopes to see no new gas boilers sold after 2035.
The funding has also been designed to improve the energy efficiency of social housing and public buildings.
Despite the intention to provide 90,000 pumps, it is estimated that there are 25 million homes in the UK currently heated by gas boilers.
However, David Whittaker, chief executive of Keystone Property Finance, said: “The government’s plans to offer up to £5,000 to homeowners to install heat pumps smacks of half-baked opportunism.
“This administration has spoken many times of bringing about a new ‘green industrial revolution’ but, as yet, we haven’t seen any worthwhile actions to back up the rhetoric.
“Housing emits nearly 20% of all greenhouse gases in the UK and so we need an all-encompassing, joined-up plan to upgrade the nation’s property stock.
“Offering money to help homeowners swap their inefficient gas boiler for an energy efficient heat pump is a start, but it is not a silver bullet.
“I’d like nothing more than for Chancellor Rishi Sunak to deliver a bold Budget next week in which he announces a genuine vision to retrofit UK homes. It’s over to you, Mr Chancellor.”
