I think in this case the least expensive alternative would not be to upgrade the current hot water system. I don't know much about plumbing but I'm pretty sure that a 40+ year old back boiler attached to a very nasty fire and gigantic hot water cylinder would take a lot of upgrading. My plan was a dry heating system, electric shower and if it exists, some form of electic water heating for the kitchen and bathroom sink. Its a small house, only 2 occupants, no bath, just a shower enclosure.