The theory and practice of social welfare has been radically redefined in every part of the developed world in the past 20 years. However, associated changes in welfare provision vary from state to state. In Britain, housing policy has played a key role in the process of welfare restructuring, spearheading the privatisation programme, promoting the quasi‐market and embracing the welfare alliance. This paper explores the welfare alliance at the interface of housing, health and social care. Specifically, the paper assesses the capacity of a restructured housing system to meet some goals of a recently reorganised health service by supplying accommodation and support for people with health and mobility problems. Drawing on surveys of local authorities and housing associations, public health professionals and housing applicants, the paper outlines the strengths and limitations of using housing provision to meet health needs. The results suggest that housing interventions may secure health gains and so advance the restructuring of health and social care. This role is limited, though, by the impact of an earlier phase of neo‐liberalisation on the social role of housing.