That's not quite right as the lower U-values will need to be justified - Building Regs don't care about room size unless it impacts part M.
I work for a company that makes woodfibre insulation for IWI. It is important to note that we do not generally recommend achieving high U-values with IWI due to the condensation risk to the structure. There is, generally, a sweet spot between 40-100mm of woodfibre that balances the energy savings, cost, and condensation risk. Part L of the Building Regulations for England offers flexibility when retrofitting existing walls, roofs and floors; for walls, an improved U-value of 0.30 W/(m2·K) is the target but a ‘threshold’ level of up to 0.70 W/(m2·K) is sufficient, as long as the approach can achieve a payback not exceeding 15 years and is ‘technically and functionally feasible’.
It is worth discussing with your local authority / BCO. For an older building, most BCOs are now sympathetic to the argument that breathability is more important than the insulation value.
It helps to approach them with evidence and we always recommend a WUFI study for any IWI to prove that the build-up won't cause moisture issues long-term; this is very useful when arguing the case for lower insulation levels. If the change of use is for a domestic home you will probably need to mitigate this performance drop elsewhere, (by e.g. upgrading roof thermal performance).
P.S. Insulated plasterboard is the work of the Devil - rarely installed properly and causes more long-term problems than it solves.