While housing can facilitate many of the freedoms associated with a ‘well-lived’ life, the Capabilities Approach (CA) is yet to have transformed housing research and evaluation. This paper explores the relationship between housing conditions and well-being, using Nussbaum’s version of the CA as the basis for analysis. It draws on data from a UK-based qualitative study of the experiences of individuals residing in privately-run hostels in the North of England. The analysis reveals much diversity in terms of the ways in which the residents perceived their housing conditions and the impacts of these on their exercise of key functions, despite all living in similar environmental conditions. This highlights the highly subjective and complex nature of the relationship between housing conditions and well-being. It is argued that a more robust understanding of the key factors that mediate the relationship being investigated is needed if the potential of the CA to advance housing research and evaluation is to be further realized.