For over 15 years, the UK government has backed schemes to improve the energy performance of homes, including the Great British Insulation Scheme (GBIS) and the Energy Company Obligation (ECO) – now in its fourth phase. More than three million homes have benefitted from insulation measures, with over 260,000 properties receiving solid or external wall insulation from TrustMark registered installers. On paper, these schemes appear successful.
However, recent media coverage has exposed a troubling reality of widespread damp and mould issues linked to poor insulation practices. Following public concern, the government launched an investigation into over 1,000 homes retrofitted under ECO4 and GBIS. Shockingly, more than half of the installations audited failed to meet required standards. In response, Ofgem has contacted 65,000 households with solid wall insulation installed since 2022. The finding of this outreach was published in an independent report from the National Audit Office on 13th October. The report suggests that a staggering 92% of external wall insulation installations carried out under EC04 and GBIS were found to have at least one major technical non-compliance.
With scrutiny intensifying, Pete Hollingworth, Managing Director of STEICO UK, argues it’s time to shift focus from installation alone to material specification. He explains:
“The botched insulation crisis rightly places a spotlight on the industry. The publication of the independent report on external wall insulation under ECO and GBIS schemes highlights that installation practices and accreditation need to be overhauled. INCA are campaigning for this on behalf of members to ensure installation quality is consistent and compliant; INCA has a robust membership criterion and sets strict quality guidelines for its members.
While media attention has been centred on poor installation, manufacturers must also acknowledge that the education of specifiers and the wider distributor supply chain is essential to correcting past mistakes.
Of course professional installation matters, as poorly installed insulation can trap moisture and cause a number of damp related issues, but it all starts with specification. To prevent mould growth in walls, the key is choosing insulation that works with the building fabric rather than against it.”
Poorly installed or incorrectly specified insulation can trap moisture, leading to damp, mould and even structural damage. Solid masonry walls are naturally breathable – they allow moisture to evaporate through the building fabric. If this process is blocked, moisture builds up within the wall, risking decay in timber joists and beams.
From a specifiers perspective, a critical metric is the ‘Water Diffusion Resistance Factor’, or ‘μ -value’(pronounced mu), which indicates how resistant a material is to water vapour movement compared to air movement. Wood fibre is a low μ-value material as it allows vapour to escape. In contrast, high μ-value materials can trap vapour making them a risky choice if not paired with proper ventilation. Most government-funded retrofits do not include ventilation upgrades, making material choice even more important.
Vapour-open retrofits: a smarter approach
There is an ever-increasing understanding within the specifier community that older buildings with solid masonry walls should favour a ‘vapour-open retrofit’, which uses insulation that allows water vapour to pass through the wall structure, rather than trapping it. Wood fibre insulation supports this approach as it allows for vapour diffusion, meaning that if moisture penetrates into the insulation layer the fibres can absorb and distribute it, helping it to dry out quickly through evaporation. Thanks to its moisture-buffering properties, wood fibre insulation helps maintain a healthy balance between airtightness and breathability – a key challenge in retrofit design.
As one of the UK’s leading suppliers of wood fibre insulation, STEICO champions a holistic approach to retrofit, helping to protect homeowners from the unintended consequences of not putting the fabric first. Pete Hollingworth adds: “Insulation is vital to improving energy efficiency and meeting net zero targets. But performance must go hand-in-hand with occupant health. Ventilation, over-heating and moisture-control need to be carefully managed. As a breathable building fabric component, STEICO wood fibre insulation can help to regulate internal humidity levels, which contribute to damp environments and associated health risks. Beyond moisture management this holistic approach also considers thermal efficiency, acoustics, durability and the carbon impacts of every project.
The scale of the challenge ahead
With an estimated 90% of the 8.5 million solid brick wall homes in Great Britain still uninsulated, specifiers face a complex balancing act. They must align Approved Document L airtightness goals with PAS 2035 and the recently published BS 40104:2025 assessment framework. It can be problematic to align all needs, but it would seem that wood fibre insulation is well positioned to help achieve this balance. Wood fibre insulation offers a compelling solution, helping to support compliance, protect building fabric and promote healthier living environments.
There is also the question of how installers can prove competence. The Insulated Render and Cladding Association (INCA), represents the external wall insulation industry.