In January 1942, Houghton became second-in-command of 40 Commando, and participated in the Allies' failed raid on Dieppe on 19 August 1942. Like the majority of his unit, he was captured by the Germans in the fiasco. As a prisoner of war, Houghton was shackled for 411 days, and remained in captivity for the rest of the war. He was subsequently awarded the Military Cross for his bravery at Dieppe and for his endurance as a prisoner of war.