An air source heat pump extracts heat from the outside air in the same way that a fridge extracts heat from its inside. It can get heat from the air even when the temperature is as low as -15° C. Heat pumps have some impact on the environment as they need electricity to run, but the heat they extract from the ground, air, or water is constantly being renewed naturally.
Heat from the air is absorbed at low temperature into a fluid. This fluid then passes through a compressor where its temperature is increased, and transfers its higher temperature heat to the heating and hot water circuits of the house. There are two main types of air source heat pump systems.
An air-to-water system distributes heat via your wet central heating system. Heat pumps work much more efficiently at a lower temperature than a standard boiler system would. This makes them more suitable for underfloor heating systems or larger radiators, which give out heat at lower temperatures over longer periods of time.
An air-to-air system produces warm air which is circulated by fans to heat your home. They are unlikely to provide you with hot water as well.