As a nation, we spend billions on home improvements, yet our housing is some of the leakiest in Europe. What would our homes look like if being energy efficient was as much of a selling point as central heating, or an up-to-date kitchen and bathroom?

Last November, 15 home owners in Oxfordshire opened their doors for an Open Eco-houses weekend. The event attracted 1,500 people - 100 for each house - proving that it's a hot issue, at least in Oxfordshire.

One of the Eco-house hosts was Sally Harper, who bought an 18th-century cottage at Great Haseley, near Thame, with her partner, engineer Tony Williams.

Once half of a brewery, it is built of stone, with a Welsh slate roof, like many houses in Oxfordshire. In estate agent speak, it was in need of improvement', and not just because there was no insulation. The only heating came from open fires, and water came from a well in the garden.

Ms Harper, who has a master's degree in sustainable energy efficient design from Oxford Brookes University, spent months tracking down insulation materials in keeping with the history of the building.

She said: "We wanted to find a way of insulating it without changing the way it worked as a building."

The house is now cosily encased in sheep's wool, held on the outside walls by wood-fibre board called Heraklith, which can be covered with natural breathable lime plaster, helping to create a mould-free environment.

It has no damp course because she believes that impermeable membranes can create unhealthy, inefficient buildings. She said: "You have to imagine the effects of living in a plastic bag. We use five times as much moisture as people 200 years ago, with showers and washing machines and dishwashers. We are asking a lot of buildings to cope with that level of humidity."

She said insulation has cut the house's energy use by half, while new heating systems produced a saving of 20 per cent. A solar hot-water system is boosted by a stove which also heats a solid, highly insulated floor, which retains the heat for 20 hours. Fuel for the stove comes from English oil-seed rape, a by-product of biodiesel production.

On the new kitchen extension, a frame of local windfall green (unseasoned) oak is filled with insulating panels of hemp mixed with lime, and rendered with lime plaster.

Water still comes from the well. Waste water and sewage pass into a cesspit and then to 140 feet of terracotta pipes buried in the garden. The decision to stay off the mains saved more than £1,000.

Seed, the eco-design business she runs with Mr Williams and architect Oliver Bridge, is preparing a presentation on low-carbon homes for this year's Ideal Home exhibition. Ms Harper said: "We have four-and-a-half million historic homes in the UK, out of a total of 24 million, and they have the worst environmental footprint. Preserving historic buildings makes good sense, because they are out of the flood plain, and usually south facing.

"The main message I would like to get across is that insulation is the biggest contributor to energy saving, so do that before you look at anything else."

It's a view shared by Oxford University's Environmental Change Institute, which recently issued a report saying housing emissions have risen by more than five per cent since 1997 and account for more than a quarter of the UK's carbon footprint.

The study, Homes Truths, by Brenda Boardman, said emissions could be slashed by 80 per cent by 2050 - but only with a huge increase in political commitment and financial support from the Government.

The report, commissioned by Friends of the Earth and the Co-operative Bank, said the Government must spend almost £13bn a year for the next 10 years, overhauling national housing stock, and enforce minimum standards for home energy performance. All homes in the UK would be issued with an energy performance certificate grading them from G (very inefficient) to A (very efficient).

Anyone who buys, or rents out a house or flat that does not meet minimum standards would not be allowed to sell or re-let it until it was upgraded. Incentives needed include grants, low-interest loans, stamp duty and VAT rebates, said Prof Boardman. It would cost £3.3bn a year for the next nine years to treat 44,000 houses a year at an average cost of £7,500 per house.

Friends of the Earth's low-carbon homes campaigner, Ed Matthew, said: "It is neither cheap nor easy for a householder to make their home low-carbon. This is the Government's fault and they must radically change their approach.

"The investment required is significant, but the economic costs of not tackling combat climate change would be catastrophic."

George Marshall, of Oxford's Climate Outreach and Information Network, which organised the Eco-homes weekend, said: "We have here in Oxford the largest concentration of these kinds of ecologically renovated housing in the country. Now we have to think of a future where the innovation you see here would become expected and normal."

Contact: Climate Outreach and Information Network, 01865 727911; Friends of the Earth,; Seed, 01844 278464.