The World Health Organisation recommends indoor temperatures of 18-24°C for healthy living. Cold and damp living conditions affect the health of many people and can worsen the symptoms of illnesses such as asthma, bronchitis and other breathing disorders. Damp also encourages the spread of dust mites which can further worsen these disorders.
Damp insulation within the wall framing dramatically reduces the insulation value, making rooms harder to heat. The combination of cold damp rooms and the presence of some fungi will worsen respiratory problems for the very young and very old.
If the space under the flooring is damp, then it is likely fungi will grow on the underside of timber flooring as well as infiltrating the flooring into the house.
Some fungi which grow within wet wall cavities and under floor boards are toxic. In particular the stachybotrys mould (a type of fungi) produces spores which carry chemical toxins known as mycotoxins. These may cause flu like symptoms. They particularly affect the young, the old and those with weakened immune systems.
Stachybotrys can be present within a damp wall cavity or on the underside of the floor boards with no obvious signs or ill effects, but once exposed or disturbed they will produce airborne spores which can be inhaled by those in close proximity
If stachybotrys is found, you will probably need to leave the home while repairs are made. People working on the removal of affected timber have to wear protective gear.
For more information see the WorkSafe publication Disaster Recovery - Health Risks from Biological Agents.