The system — an air source heat pump — extracts heat from the air and works in temperatures of down to minus 15 degrees centigrade.

It requires just a small amount of electricity and no oil or gas. Maker Mitsubishi Electric says the technology works like a refrigerator in reverse, cuts home energy costs by 30 to 50 per cent and can connect to existing radiators. 

George Bowlt is developing three stone cottages in Fairmoor on the outskirts of Morpeth. There is no gas supply to them and options were limited to costly LPG or electric heating.

"Installation is simple for a qualified fitter, no Gas Safety Certificate is needed, and with gas prices rising and the threat of future energy shortages it is a perfect solution," he said.

"These systems simply require a neat external box — saving interior space where a boiler would go — and the technology is tried and tested in climates far more severe than ours. 

"They cost slightly more up front but you re-coup that on energy savings."

The first of the cottages will be completed before Christmas.