This study focuses on the development of advanced water resistant bio-based composites with enhanced hygrothermal performance for building applications. The highly porous structure of hemp shiv is responsible for low thermal conductivity and allows the material to adapt to varying humidity conditions providing comfortable indoor environment. However, the pore network and the hydrophilic nature of hemp shiv affects the compatibility and durability of the material in presence of excess moisture conditions. In this work, novel hemp shiv composites were prepared in a starch based or silica based matrix and characterised for their hygroscopic, thermal and mechanical properties. The hemp shiv based composites were resistant to water yet permeable to vapour and showed excellent moisture buffering capacity when compared to conventional hemp-lime composites. The composites prepared were light weight with low thermal conductivity values of 0.051–0.058 W/mK and showed good mechanical performance. Hemp shiv composites with superior hygrothermal characteristics have immense potential as robust thermal insulation building materials.