The House of Lords was acting in a purely judicial role, not a legislative one.
It can only decide on cases presented to it with an interpretation of the relevant law(s). If the scope of the Human Rights Act is established in the legislation and is unambiguous and quite clear, then the Law Lords had no option but to find as they did. This is not an opinion by them that the lady should be evicted, but her eviction may well be the consequence of a serious flaw in the Act itself.
I would hope that the Law Lords expressed a criticism of the Act, to say the least, but a full report has not yet surfaced in the media. The papers, as usual, prefer the sensationalist headlines.
Any amendment to the Human Rights Act would come too late for this old lady but the Act needs some serious overhauling.