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Sounds very like my son's previous house. His heating requirement was about 10kW. If you want to know what your heating requirement is, use the Whole House Boiler Size Calculator.I have an end terrace house 3 beds, fairly spacious as is ex council, I believe it was built in the 60's and has had cavity wall insulation. We also had the loft insulation done when the government push for Part L kicked in, think we have 300mm loft insulation. It has double Glazing but this is fairly dated and is also on my list of things to update at some point.
Many say that combi boilers are sized on HW only. But if the CH requirement is not taken into account you get the situation where the boiler cannot modulate low enough to meet the CH demand, so it has to operate in on/off mode. In worst cases it does this all the time.
Did you measure the cold water flow rate before deciding on a 40kW boiler?