This paper draws on the figurational sociology of Norbert Elias in understanding the current housing crisis in the UK: one which emphasizes the social interdependencies between individuals and groups, and the power relations that characterize them, in explaining household behaviour. It is argued that such an approach can contribute to a better understanding of housing processes and their differentiated outcomes. At the same time, this analysis exposes the myriad negative consequences that emerge from short-term housing policies based on static, over-simplified assumptions and applied to an ever-increasingly complex housing figuration, which is constantly in flux. These arguments are made with reference to empirical evidence on the impact of changes to housing benefit in the private rented sector, which shows how neoliberal housing policy contributes to long-term detrimental effects on marginalized households and groups. Through this example, it is argued that the governmental presentation of welfare reforms differs markedly from the reality of consequences on the ground and corresponds to “neoliberal state-crafting”. It is suggested that any approach to understanding the complexities of the housing system must retain a focus on historical change, precedents and fluctuations in power balances to avoid the pernicious “retreat into the present” characteristic of policy.