How bad is dry rot?
Although it’s called Dry Rot, it is a fungal condition caused by damp, so whatever you do you must find out where the damp is coming from and cure that problem first. Next you need to remove all rotted wood, cutting back into sound timber to make sure all traces of the fungus has been removed. It is doubtful whether this work would be covered by your house insurance, but you can always ask. The cost, of course, will depend on the extent of the damage and what will need to be done to prevent the egress of further moisture.
