As i posted a day or so regarding someones query about insulation. I have just gone through first winter after having insulated the top floor of house, my kids used to refer to our bedroom as the "fridge" as it was so cold (3 outside walls) but now its snug and warm and heating bills have plummeted.
The process you are thinking of is dry lining, you dont need battens ect, For insulating older properties i.e. no cavity use thermal wall board, available at most builders merchants. Essentially it is plasterboard with a slab of polystyrene bonded to it, it comes in various thicknesses and is relatively inexpensive. You bond it to the wall with dry wall adhesive (looks a bit like grey plaster) also at builders merchant after having removed skirting and anything else in the way. Strip wallpaper,no need to remove existing plaster if its in reasonable condition, loose stuff, remove and patch, no need to make a mirror smooth finish as its going to be boarded over with the thermal board. You only need to do outside walls, obviously, and you dont really lose any space...its not noticeable when finished, except for the warmer house.
The board should stop a couple of inches above floor, replace skirting and build up frames to windows and doors if required to cover edges of new depth. My old Victorian house is now snug and warm, and gas bills cheaper..)
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