When Good Retrofit Goes Bad: What the NAO’s Warning on Insulation Failures Means for Property Owners
Thousands of UK homes are now suffering from damp, mould and ventilation problems following insulation works that were meant to make them more energy efficient.
Recent findings from the National Audit Office (NAO), reported by The Independent, reveal that up to 98% of external-wall insulation installations funded under the government’s Energy Company Obligation (ECO) scheme are defective.
That’s around 22,000 to 23,000 homes now needing corrective work — and a further 9,000 to 13,000 internal insulation jobs have also failed, with some posing immediate health or electrical safety risks.
For landlords, housing providers and asset owners, this is a wake-up call. It highlights that poorly executed retrofit can damage both assets and occupant wellbeing — the very outcomes the net-zero transition aims to improve.
A Retrofit Reality Check
The NAO’s report shines a harsh light on the challenges of large-scale retrofit delivery:
Weak quality control and inconsistent contractor oversight
Ventilation issues leading to condensation and mould
Fraudulent or unverified installations due to poor auditing
Lack of joined-up design — insulation added without addressing heat and moisture balance
Instead of warmer, cheaper-to-run homes, many properties have become colder, damper and more expensive to fix.
For property owners and portfolio managers, this raises two crucial questions:
How do we continue to decarbonise responsibly?
How do we protect asset value and occupant comfort in the process?
Fabric First — But Not Fabric Only
The “fabric first” principle remains important, but the NAO’s findings show that fabric improvements alone are not a silver bullet.
Without proper design, ventilation and commissioning, insulation can trap moisture and accelerate deterioration. Many existing buildings — especially in education, student accommodation and private-rented sectors — face practical barriers to deep retrofit, from heritage restrictions to occupancy patterns.
That’s why an increasing number of asset owners are turning to light-touch retrofit: scalable, low-disruption upgrades that optimise energy use before investing in heavy structural works.
Light-Touch Retrofit: Smarter Heating, Real Savings
Light-touch retrofit focuses on how energy is controlled and consumed, not just how it’s contained.
By integrating smart heating controls, sensors and automation, property owners can achieve significant energy savings — quickly and safely.
How It Works
Room-level control: Smart radiator valves (TRVs) enable zoning, so only occupied rooms are heated.
Occupancy detection: Sensors automatically lower temperatures when rooms are vacant.
Portfolio monitoring: Cloud dashboards show live heating data across multiple buildings.
Behavioural insight: Analytics reveal patterns of waste (e.g. radiators left on overnight).
Proven Impact
10–25% energy savings typical, with ROI often under 12 months
Minimal disruption — no major building works or downtime
No damp or condensation risk, unlike poorly installed insulation
Supports future upgrades — such as heat pumps or renewables
Benefits for Landlords and Asset Managers
For multi-site owners, the case for smart heating goes beyond efficiency:
Rapid deployment: Installations can be completed by existing maintenance teams.
Centralised control: Manage multiple properties from one dashboard.
Data-driven decisions: Identify inefficient buildings and prioritise investment.
ESG & compliance: Demonstrate proactive carbon reduction to investors and occupiers.
Asset protection: Reduce overheating, damp and excessive boiler cycling.
Avoiding the Pitfalls of Poor Retrofit
The NAO’s warning makes one point crystal clear: retrofit done badly is worse than no retrofit at all.
To avoid repeating these mistakes:
Adopt a whole-building mindset — consider insulation, ventilation and heating control together.
Work with accredited professionals and insist on independent verification.
Measure results — use energy data to confirm actual performance, not just promised outcomes.
Invest incrementally — prioritise fast-return measures such as heating control before deep fabric changes.
A Smarter Path to Decarbonisation
At Energenie Solutions, we believe decarbonisation should be practical, data-driven and low risk.
Our retrofit-ready smart heating controls and portfolio dashboards help property owners cut heating waste by up to 25%, often with payback in less than a year.
In light of the NAO’s findings, one message is clear:
“Retrofit doesn’t have to be risky. It has to be smart.”
Before committing to large insulation projects, ask:
What can I save today by simply controlling what I already heat?
Start with a Free Heating Management Survey
Energenie Solutions helps businesses and property owners identify opportunities to cut energy waste, improve comfort and future-proof their buildings.
👉 Book your free survey
or visit energeniesolutions.com to learn more.
