Manufactured insulation materials have been tested for their properties, and so have certification to show they satisfy standards such as fire retardancy. As long as the material is installed in the way laid out in the certificate, its use will be accepted by Building Control.
If you want to use sheep’s wool insulation in a DIY way, it's basically up to you to show Building Control that your approach will meet standards (as opposed to using a certified product which does that work for you). This shouldn’t be a problem but will involve extra work and time. Building Control's main interest will be twofold:
Firstly, meeting the requirements of Part L, (relating to thermal performance) of the Building Regulations. This is technically possible as sheep’s wool has a similar thermal performance to other fibrous insulation materials, and provided there is the thickness necessary to achieve the values needed for current Building Regs the requirement should be met. But the onus is on you to demonstrate this to your Building Control officer - installing more than the minimum thickness required is a good start.
Secondly, you need to show Building Control how your material will perform in relation to aspects such as fire safety. Read more about Building Regulations & Building Control on the Planning Portal Website.
We used sheep's wool to insulate our information centre back in 2000. The wool was from the British Wool Marketing Board and had already been scoured (washed three or four times to clean it and remove the lanolin) and carded (teased and thinned out). It was delivered to us in hanks and we installed it in the wall cavity at a density of around 25kg per cubic metre. The wool was then surface sprayed with Borax, a salt based solution derived from the mineral salt, boron, which increases its resistance to fire, moths, and other insects. We used a 10:1 mix of water and boron.
You do need to be more careful with a DIY approach. The wool we used was cleaned and sprayed thoroughly with borax and installed in a sealed cavity, and we haven't experienced any problems - but we have heard of sheep's wool in lofts becoming infested with moths, possibly because it wasn't sprayed well with borax. Action to address any problems would be disruptive (i.e. opening the construction to treat the wool again or remove it altogether).
Wool is only suitable where it can be kept dry, as if wet the extra weight will cause it to slump and sag, eliminating air pockets and affecting its insulating value. We used it in timber frame cavity walls as part of a 'breathing' wall construction, allowing moisture to pass through rather than becoming trapped within the construction.