Internal Wall Insulation Problems: Damp, Mould and Condensation

What is Internal Wall Insulation (IWI)?

Internal wall insulation means fixing insulation to the inside face of external walls — either insulated boards fixed to the wall, or a frame filled with insulation and boarded over — and then finishing it. It is used on solid-walled homes and was one of the measures funded under ECO4 and GBIS.

Why Does Internal Wall Insulation Cause Problems?

Fitted properly, internal wall insulation can work well. Problems usually come from design or installation errors that let moist indoor air reach the cold original wall. The National Audit Office found that 27% of ECO4/GBIS internal wall insulation homes had major issues affecting performance, "often creating the risk of condensation and mould".

1. Interstitial Condensation

The most serious risk with IWI is condensation forming between the insulation and the original wall:

• The original wall is colder once it is insulated on the inside
• Warm, moist indoor air that gets behind the boards condenses on it
• Water becomes trapped with no easy way to dry out
• Mould can grow hidden behind the insulation boards
• Timber battens or fixings can decay if they stay wet

2. Missing or Poorly Fitted Vapour Control Layers

Many IWI systems rely on a continuous vapour control layer on the warm, room side to keep moist air away from the cold wall. Common faults include:

• The vapour control layer left out, or not continuous
• The layer fitted on the wrong side of the insulation
• Poor sealing at board joints, edges, sockets and pipes
• A membrane or board unsuitable for the wall it was fixed to

3. Inadequate Ventilation

Insulation work usually makes a home less draughty, so moisture from cooking, washing and drying clothes has to be removed another way. Inadequate ventilation was one of the health and safety risks the NAO highlighted in internal wall insulation audits.

• Extract fans missing, too weak or not working in kitchens and bathrooms
• Trickle vents absent, blocked or kept closed
• Ventilation not considered as part of the retrofit design
• Condensation builds up with nowhere to go

4. Thermal Bridging

Cold spots where insulation is interrupted create condensation hotspots:

• Around window and door reveals (often left uninsulated)
• At ceiling and floor junctions
• Where internal partition walls meet external walls
• Behind radiators and fitted furniture

5. Electrical Safety

The NAO listed poor electrical safety among the health and safety risks found in some internal wall insulation audits. Sockets, switches and cables often have to be moved when boards go on. If you notice scorch marks, a burning smell, buzzing, or sockets coming loose from the wall, stop using them and have a registered electrician check them.

6. Loss of Living Space

Internal insulation takes some depth from every wall it covers; how much depends on the thickness of the system. It can also affect skirting, coving, window reveals, radiators and where furniture fits.

Signs Your IWI May Have a Problem

These signs can also have other causes, such as a leaking gutter or failed pointing, so they do not prove the insulation is at fault. They are worth recording and getting checked.

Early signs

• Black mould in corners - especially where external walls meet ceilings and floors
• Condensation on walls - walls feel damp or show water droplets
• Musty smell - persistent odour even with ventilation
• Cold patches on insulated walls - the insulation may not be performing as expected

Signs of moisture behind the boards

• Wallpaper peeling - moisture behind the plasterboard affecting adhesion
• Paint blistering or flaking - especially on insulated external walls
• Plasterboard damage - discolouration, softening or bowing
• Worsening mould - spreading to furniture, clothes and belongings

Signs of more serious problems

• Timber decay - battens, skirting or floor edges softening or rotting
• Electrical warning signs - scorched, loose or buzzing sockets on insulated walls
• Health effects - breathing problems that are worse at home

Government health guidance says damp and mould "predominantly affect the airways and lungs", and that people with asthma or other lung conditions, weakened immune systems, children, older people and pregnant women are among those at greater risk. If anyone in your home has symptoms, speak to your GP.

IWI Problems by Property Type

Victorian/Edwardian Solid Walls

These properties need particular care:

• Traditional lime mortar and plaster take up and release moisture; an unsuitable system can stop the wall drying
• Existing damp, for example from failed pointing or gutters, can be trapped behind the boards
• Period features such as cornicing and picture rails are often disturbed

Interwar and Post-war Homes

• Some have cavity walls; any damp coming from the cavity needs sorting out separately
• Older homes can contain asbestos in coatings, boards or panels — have it checked before walls are stripped out

Flats and Apartments

• Limited external wall area makes ventilation critical
• Leases may restrict alterations; check with the freeholder or managing agent
• Removal can be complicated by shared walls and access

ECO4 and GBIS Internal Wall Insulation: What the Audits Found

The National Audit Office report on the Energy Company Obligation (HC 1334, 14 October 2025) set out the results of audits carried out between June and August 2025, covering internal wall insulation installed before 16 January 2025:

• 29% of homes have major issues requiring remediation — between 9,000 and 13,000 homes
• 27% have major issues affecting performance, often creating a risk of condensation and mould
• About 2–3% have health and safety risks needing immediate correction, such as inadequate ventilation and poor electrical safety
• 35% had minor issues and 35% fully met the PAS 2035 standard
• Repairs should normally cost £250–£6,000 per home if done before major damage, paid by the installer or guarantee

The Commons Public Accounts Committee later called what happened a "clear and catastrophic failure" (HC 1229, 23 January 2026).

First Step if Your IWI Was Fitted Under ECO4 or GBIS

Government guidance is that households with internal wall insulation under ECO4 or GBIS need take no action unless they have concerns. Unlike external wall insulation, internal wall insulation homes are not all being offered TrustMark's free Find & Fix audit. If you are worried:

• Contact Ofgem's ECO contact centre on 0808 169 4447 (Monday to Friday, 9.30am to 4.30pm), email ECOhelp@ofgem.gov.uk, or use Ofgem's online form. Ofgem assesses concerns and may arrange an audit.
• Have any letter from Ofgem about your insulation, and your installer's details, to hand if you have them.
• If faults are confirmed, the installer should fix them. If it has stopped trading or will not, the 25-year guarantee covers repairs up to £20,000 (£25,000 for Installation Assurance Authority guarantees since 17 June 2026). The National Energy Foundation may cover some homes where the guarantee was cancelled, fraudulent or missing.
• You should not be asked to pay. Nobody needs to charge you a fee to access this route.

Our guide to the free Find & Fix audit and the internal wall insulation route explains who pays and how each route works.

If No Free Route Applies: Your Options

If your insulation was not fitted under ECO4 or GBIS, check the installer's guarantee and complaints route first. A specialist will charge for surveys and work unless a guarantee covers it.

Option 1: Complete Removal

When to consider:

• Severe condensation and mould in several rooms
• Wet or decaying timber, or damaged plasterboard
• Mould that keeps returning despite better ventilation
• No effective vapour control layer across large areas

What's involved:

• Strip insulation boards and plasterboard
• Remove contaminated timber battens
• Let the wall dry and repair it
• Replaster and redecorate affected rooms

See internal wall insulation removal for what the work involves.

Option 2: Targeted Repairs

When to consider:

• Problems limited to specific areas (corners, reveals)
• Recent installation with limited defects
• Boards and battens still dry and sound

What's involved:

• Better extract ventilation, or a whole-house system (MEV or MVHR) where a designer recommends it
• Repair thermal bridges at junctions and reveals
• Replace or reseal vapour control layers where they can be reached
• Seal around sockets, pipes and other penetrations

Option 3: Manage the Problem While a Repair Is Sorted Out

When to consider:

• Problems are mild
• You are waiting for an audit, installer or guarantee provider to act

What's involved:

• Use extractor fans and open windows after cooking, bathing and drying clothes
• A dehumidifier can help in affected rooms
• Keep rooms heated as consistently as you can
• Keep dated photos and check for worsening damage

Getting Help: Next Steps

Frequently Asked Questions

Can internal wall insulation be fixed without complete removal?

Sometimes. If the main cause is poor ventilation or gaps at junctions, better ventilation and targeted repairs may be enough. If the vapour control layer is missing throughout, or boards and battens are already wet or mouldy, removal is more likely. Only an inspection of the specific wall can tell.

Will my home insurance cover IWI problems?

Often not. Many policies exclude faulty workmanship and damage that builds up gradually, such as condensation. Check your policy wording. For ECO4 or GBIS work, repairs should be covered by the installer or the guarantee instead.

How long does IWI removal take?

It depends on how many rooms are affected, how the boards were fixed and the condition of the wall underneath. Ask for a written programme with any quote, including drying time before redecoration.

Can I claim compensation?

There is no government compensation scheme. Under ECO4 and GBIS the official remedy is repair at no cost to you, and the guarantees do not cover ill health, belongings or loss of earnings.

For other losses you may have rights under consumer law. Services contracted from 1 October 2015 must be carried out with reasonable care and skill (Consumer Rights Act 2015, section 49). Contract claims generally have to be brought within six years in England and Wales (five in Scotland), and the small claims track covers claims up to £10,000 in England and Wales (£5,000 in Scotland and Northern Ireland). Get independent advice first, for example from the Citizens Advice consumer helpline on 0808 223 1133.

Is internal wall insulation always bad?

No. The same audits found 35% of ECO4/GBIS internal wall insulation fully met the PAS 2035 standard. It tends to work when the home is properly assessed and the work includes:

• A suitable system for the wall, with vapour control where the design needs it
• Adequate ventilation
• Careful detailing at junctions and reveals
• Quality materials and workmanship

For scheme work, PAS 2035 sets the whole-house retrofit process, and TrustMark requires a Retrofit Coordinator site visit on PAS 2035 projects that include internal wall insulation.

Should I buy a house with internal wall insulation?

It can be fine, but check carefully, especially if it was fitted under ECO4 (from 2022) or GBIS (from 2023):

• Consider an RICS Home Survey Level 3 rather than a basic survey
• Ask the seller for the 25-year guarantee certificate and any Ofgem or TrustMark letters
• Ask whether an audit or repair has been done, and get the paperwork
• Look for condensation, mould and cold patches on insulated walls
• If problems are found, find out whether a scheme or guarantee repair is under way

Related Information

Sources

• National Audit Office — Energy efficiency installations under the Energy Company Obligation (HC 1334, 14 October 2025)
• Public Accounts Committee — Faulty energy efficiency installations (HC 1229, 23 January 2026)
• gov.uk — What to do if you have poor quality wall insulation
• HM Treasury — Treasury Minutes, government response to the PAC (CP 1522, April 2026)
• DESNZ — Greater protections to restore families' trust in home upgrades (17 June 2026)
• Ofgem — ECO complaints process
• TrustMark — Free Find & Fix audit offer
• TrustMark — Retrofit Coordinator site visit requirements
• MHCLG, DHSC and UKHSA — Understanding and addressing the health risks of damp and mould in the home (updated 1 April 2026)
• Home Owners Alliance — How much does a house survey cost?
• Consumer Rights Act 2015, section 49
• Citizens Advice — consumer helpline

Last reviewed September 2026.