I'm building a very large house but for a while now everything has been jerky and slow. I've taken away many of the trees, I've reduced and even turned off all of the many lights and neither option has helped.
I've taken away much of the clutter and still the framerate seems really low. Only when I put my sim into the small basement do things speed up and appear normal again.

Is it simply that the house is so big that is causing the problem?

I've seen this happen a few times, I believe it could be glitch-related, but here's a suggestion:

-Set Rendering Distance on Low
-Load only 1 lot

Does the frame-rate improve? If not, either your computer can not load the house efficiently or you have a CC issue. Try merging your files. I've seen this "glitch" randomly crop up less often after updating to the 4.2 patch.

Just out of Interest how much RAM do you have? That sounds to me like the game is loading your house into the RAM and filling it up, so your computer is having to dump to pagefile and then retrieve it, which is incredibly slow. Either that or your GPU (graphics card) or CPU is having a heart attack with how much stuff its got to render.

Then again, I have this happen to me randomly, I have an "alright" PC, certainly good enough for TS3, I find that when it starts to lag, if I save then it normally clears it up.

What do you mean by load only one lot?

If you, like many have a butt load of custom content. You can improve performance by using S3PE to merge many files into a few. I noticed a marked increase in performance after merging a few hundred files into a half a dozen. More on S3PE here

I've turned my settings down at that's reduced the frame rate drag by about half. I usually keep my settings on high as it works fine but I guess for this lot it needs a reduction.

Theres a few factors involved but in a nutshell:

1) Remove all CC. Load. Whats it like now?
2) Use Delphys Dashboard. Fix red files.
3) Use process monitor. Does a particular file keep coming up?
4) Merge the files.

This should weed it out, but using those apps first time can be a headache.

I have the same issue, 3.5gb of custom content (the majority sims3packs) really slowed my game down. I usually can play at full spec but now I'm barely getting enough frames to play mid-to-low spec.

Can sp3e combine sims3packs? or just .package? The majority of my content are in sims3packs.

sims3packs are already merged by the launcher.

Ah, okay. Thanks.