Invalidate housing with old prison (7)
I believe the answer is:
newgate
'old prison' is the definition.
(former London prison)
'invalidate housing with' is the wordplay.
'invalidate' becomes 'negate' (I've seen this before).
'housing' means one lot of letters goes inside another.
'with' becomes 'w' (abbreviation).
'negate' going around 'w' is 'NEWGATE'.
(Other definitions for newgate that I've seen before include "Old Nick" , "Notorious 18th-century London prison" , "Old London prison" , "prison long ago" , "Stir in capital" .)