Points out that ventilation heat loss can account for 50% of total loss in a well-ventilated house. Presents analysis of mechanics of natural ventilation. Describes computer-based model developed by British Gas Corporation for predicting ventilation patterns in houses. Uses calculations applying the method to illustrate basic reasons why natural ventilation is likely to cause problems in heating well-insulated dwellings. Discusses these problems in detail. Treats how ventilation could affect sizing of appliances and indoor thermal environment. Presents results of computer simulation of thermal behaviour of a well-insulated dwelling.