The adoption of timber, specifically cross-laminated timber (CLT), as a primary construction material is gaining traction due to its carbon sequestration capabilities, environmental advantages, and potential for precision manufacturing. However, the combustibility of wood raises legitimate concerns about fire safety in timber-based residential buildings. This paper investigates the fire performance of timber in a residential context, attempting to fill knowledge gaps and outline strategies for improving fire robustness in timber-built dwellings. Through comprehensive experimental studies on residential-type enclosures constructed with CLT panels, this research explores different configurations and the effects of varying degrees of non-combustible protective lining. The findings underscore the significance of considering timber surface exposure and adopting effective encapsulation strategies in CLT buildings. It has been estimated that the exposure of timber walls leads to a proportional increase in heat release rate, corresponding to the area of exposed timber surfaces and their charring rates. Consequently, the external flame has a larger projection, resulting in a much greater heat flux to the façade. Furthermore, threshold conditions for initial flaming self-extinguishment of timber defined in literature of 44.5 ± 1.2 kW/m2 have been found to be applicable to the experiments conducted in this research. Finally, it has been observed that partial encapsulation, where the protective lining will likely fall off during a fire, may hinder rather than increase the likelihood of self-extinguishment. This work contributes towards a nuanced understanding of fire dynamics in timber structures, offering insights for safer and more effective design strategies for CLT-based construction.