Abstract Housing is a problem in all developing countries. Presently South Africa has a large urbanization drive, to such an extent that over the next 10 years 1300 houses per day must be built to alleviate the problem. Most of the houses currently being erected could be described as ultra-low-cost houses. These houses are constructed by their owners in record time from corrugated iron. Advantages are the accessibility of building material and straightforward building techniques. Unfortunately the dwellings are thermally and energy inefficient. As a result inhabitants spend a disproportionate percentage of their income on winter heating. They use highly polluting and low energy content fuels such as wood and coal. This presents health risks and burdens the environment and natural resources. This paper evaluates the potential of inexpensive modifications which contribute to improved living and environmental conditions. Investigations are based on a unique analysis method which is eminently suitable for application to the problem. Modifications such as cardboard insulation showed the most potential. Although often available free of charge as waste products, results indicate that a definite cost saving incentive exists even if owners have to buy the cardboard. Modifying the houses as suggested reduces energy requirements and the release of greenhouse gases into the atmosphere by up to 75%. The subsequent reduced burning of wood and coal also improves indoor living conditions. Implementing the results of this study thus will not only benefit the inhabitants of ultra-low-cost housing but will also help to preserve the environment.