Trouble is, if you only give houses to folks on the housing list in cheapy areas, you end up with making a social divide even bigger.
Not that I particularly agree or care about that side of things, but that's the reason I believe. Social integration and all that is b*llocks, if people want to live in nive houses they should work hard for it like the rest of us have to. Can't afford a 5-bed house for all your kids? Not a problem, take the kids off them and give them to families on the adoption list and that those who want IVF on the NHS.
Also worth remembering that the £26K is a cap, not what most families will receive before we get too Daily Mail in here