I'm talking about the emitter rather than the source. (ductless) Air/Air is relatively unused in the UK (except for aircon) for the (stupid) reasons described, work perfectly well even in very cold climates) and offer extremely good COP values (4.68@ 8C, 2.46@ -8C) which is likely better than retro-fit of Air/Water, given the difficulty of right-sizing such a scheme in an existing, older building. If the government really wants uptake of heat pumps, they should be pushing for these to be installed in flats (like they do in most of the rest of the world).
As you say (and the original article points out) - whether it's economically a good idea depends a lot on the electric:gas price ratio, which currently is around 3.2, so the COP needs to exceed 2.95 or so for the OPEX to be lower (let alone the CAPEX of having the thing installed in the first place). And historically the gap has been even larger - nearly 5:1, meaning the gain would have to be 4.56 even to break even - "somewhat ambitious"!