It's not really correct to say that heat pumps don't work well on old, poorly insulated houses in cold climates. That it's a heat pump is not the issue, that it's cold is not the issue, the problem is only that with poor or no insulation in a cold climate you'll need a huge heater (say, 10-15kW just for the living room). And domestic heat pumps are not designed for that range. If you could get one that big then it would work very well indeed.
If you have a poorly insulated house then the fix is to insulate it, which is what a lot of people are doing around here, with very hold houses. My house is less than 60 years old and very well insulated for the time, and it holds up even today - it's always warm, with the heat pump not even close to its max power.
The issue with “just” insulating your home is that many homes weren’t designed with insulation in mind and thus it’s not a straightforward proposition.
For instance, masonry was a common building material and that is not easy to insulate. You need to add many inches of insulation on either the outside or the inside, both of which have complications.
Even in a basic stick framed house, you’re still talking about taking down all the exterior walls, likely involving removing plaster and replacing it with drywall. Plaster has a number of nice properties, so it’s sad to remove. And that’s not to mention the price of this work.
Finally, roofs need special consideration. Most roofs today need to be properly vented, which was not as much of a consideration when the houses naturally breathed. Venting today is often done with soffit vents. Yet on historic houses, soffits are typically one of the nicer details. It’s not trivial or cheap to install venting in such cases.
> If you have a poorly insulated house then the fix is to insulate it
I've been quoted prices to insulate my house that represent 50% of the original acquisition price of the house.
I would need to pay 0€ for both electricity and heating for the next 100 years for this to make sense at current prices.