It is commonly accepted that the recording of holograms with atomic resolution requires singlecrystalline samples. Closer analysis, however, shows that the reduced information contained in holographic images of polycrystals is still sufficient to determine the distances between a probe nucleus and its neighbouring atoms. The accuracy should be adequate for the examination of local lattice distortions even if the information about the directions of the position vectors of neighbouring atoms is lost. It is the principal aim of the suggested experiment to demonstrate that neutron holography is suitable to study local distortions also in the case of polycrystals thereby opening up a wide field of applications for this method. In order to prove the above concept we propose an experiment on yttrium hydride, a well-known metal-hydrogen system, to be performed on the instrument SXD.