Key Points:

A quarter of a million homes are so cold, damp and poorly built they are causing serious health problems, according to a significant new study.

The problem with the houses - which are poorly insulated, some with black mould and potentially toxic air quality - could cost more than $20 billion to put right, say report authors.

It is not just a problem with old homes. Many new homes and renovated homes lack adequate insulation, heating, ventilation and double-glazing, as builders and landlords invest their money instead in superficial improvements to increase houses' value.

The New Zealand Business Council for Sustainable Development, which commissioned the survey of 3500 households, says the country is suffering a "massive" housing problem and it has called for law changes to bring homes up to scratch.

Respondents said they and their children suffered from a wide range of illnesses, including sinus problems, mould allergies, asthma, bronchitis and pneumonia, caused by damp and badly insulated homes.

Business Council chief executive Peter Neilson says, "Talk to anyone coming to New Zealand and they say they have never been colder in homes."

The problem has been made worse by rising electricity costs. People responding to the survey said they had been forced to move into the lounge during winter to keep warm; and mould and damp had caused their children to be repeatedly admitted to hospital with respiratory and other health problems.