Dishwashers contain a water softener, the hardness of the water supply is irrelevant.
If it leaves streaks on things it is either faulty or not being used correctly.
Dishwashers also do a much better job than hand washing, use less water, and a much higher temperature which kills bacteria.
For the original query - a 7kW instant undersink heater will be next to useless, cost £100s to install and never recover it's installation costs in water savings.
If you really must have an electric heater there, get a stored water type such as this: http://www.screwfix.com/p/ariston-andris-lux-2kw-15ltr-undersink-water-heater/9720g
which can connect to your existing socket circuit.
