Thanks for your reply. I think this type of system has been installed as standard in the 30-odd houses in the development built around here at this time, just outside Belfast. It could be a (Northern?) Irish thing :) Although, the fact that thermostatic valves are available for this kind of application suggests that this method of heating the water is at least practiced by more than a few people locally. I sounds like it's just a cheapo way of heating a small-ish house.
This system is evidently a novelty to many of the esteemed uk.d-i-y contributors, so I will post up some pictures during this week.
That's correct.
No, and I'm a bit peeved about that. The transaction was completed a few weeks ago. Since the house was basically new I did not get a full survey done on it, which would probably have uncovered the issue before now. I didn't try the HW, assuming (foolishly) that it worked because the CH seemed to work perfectly. I have been meaning to try to get in touch with the sellers to find out if there is a known problem with it, but I probably don't have much recourse with them unfortunately. I guess you can tell I'm an FTB.
No, it is definitely a "proper" thermostatic valve intended for this application. It has temperature markings all the way up to 90 AFAIK (not just numbers 1-5ish that you normally see on radiator valves). Previous posters have suggested that it may not be opening all the way, although I did move it to it's fully-open position.
Thanks for that tip. I will try that.
This is probably an important clue. The return pipe coming out of the bottom of the cylinder gets to a T junction a short distance away which I guess is the main return for the whole system. The water flowing through the top line (as opposed to the leg) of the "T" is very warm but not as warm as the flow pipe - which sounds like what you would expect. However, the leg of the "T" which comes from the cylinder is stone cold. I guess that is because the cold water is just sitting there without moving through the coil.
Once again, thanks to everyone who has replied. This has been an interesting discussion.