As part of the upgrade, new "A" Rated white goods will be installed, draught proofing will seal the many gaps in a house of this style and the chimney flues will be blocked to stop heat escaping.
Once the upgrades are complete the project team will assess the benefits of low carbon technologies, which can be fitted to existing homes, and the impact of using natural resources such as the sun, wind and rain.
"This house might be an extreme example as we removed post-1930 additions but millions of us live in homes like this," said Dave Clarke, Head of Research and Development at E.ON.
"And those homes are responsible for almost a third of the CO2 emitted in the UK, so any benefits we identify here could go on to lower the bills and the carbon footprints of millions of families.
"Most recently we’ve been attempting to find out where the house was losing heat by pressurising the building and then attempting to monitor where the worst of the warm air was escaping.
"What we found was that we simply couldn’t pressurise the house – there were so many leaks that, as soon as we pumped air in, it was coming out."
The final year of the three-year project will see the house transformed into a zero carbon house, in line with Government targets set for 2016.
Dr Mark Gillott, who is leading the research at the university, said: "The house provides us with a unique test facility to measure the exact cost benefit, energy efficiency and carbon reduction figures achieved through the various upgrade measures we are implementing over the next two weeks – valuable information when deciding on which of the many energy efficiency measures are the most cost effective."
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