The former professional footballer was making the first defence of the title and was thought to be well ahead on the cards following 10 riveting rounds at the Bowlers Exhibition Centre.
However, while one judge scored it 96-94 for Woodhouse, the two others gave it to Singleton 96-94 and 96-95 to the great surprise of those in attendance.
Woodhouse certainly had the better of the early rounds and his opponent was cut beneath both eyes as the champion imposed the southpaw jab, with a heavy left landing at the end of the third.
Singleton, to his credit, had his moments but the classier work of Woodhouse saw him put rounds in the bank.
With Singleton's face marking up badly a strong finish was imperative and although Woodhouse continued to walk forward the challenger did have success off the ropes.
The 10th and final round saw the Driffield man docked a point for hitting on the break, and that ultimately cost him his title.
The 32-year-old's close friend and promoter Dave Coldwell will surely seek a re-match with the new champion, although Woodhouse threatened to quit the sport in the immediate aftermath.
It was a good night for the rest of the 'house' fighters with Prince Arron and David Barnes both winning, while super-bantamweight prospect Liam Hanrahan made it three wins inside the distance.