MQ transfer applications-HELP!!

..just wondering if anyone experienced similar and can help..Currently living in tiny 4 bed with wife, two 14yr olds, my 10yr old and 8month old..also have my 14 yr old down during school hols so at regular times, 5 kids & us! House we in so tiny cant fit 6 seat dining table in so meals are in two sittings, cant fit 2 sofas comfortbly in lounge so tv is tag team!! Filled in 1132 for transfer to larger 4bed in late December. Was offered a house no bigger than current one so turned it down on those grounds. After liaising with aldershot HIC, they advised me to look out for any 4beds locally that were due to come up for allocation large enough to fit us all in. sure enough we heard there was a large 4bed coming up mid-march so notifoed housing who told me they would put the address on our file and when the property came up for allocation, we would be strong contenders unless, quote "a welfare case or someone with higher priority" came up. Called back early last week when i was told to, only to be told it had been allocated..after some digging we found out it had been allocated to a local family already in a 4 bed of the same size they were offering us, not only that, they only have 3 kids, one 22, one 19 and a 10 yr old - all male (ours mixed sex). Not quite sure how exactly they are higher priority so i called housing liason officer who said he would look into it. Called back today and was told they had made a mistake in allocating the property and we were overlooked however the allocation could not berevoked...and theres nothing else we can do...
Has this happened before and is this info correct, can a property be taken off someone once they have been allocated but not matched in if someone with higher priority was already waiting??
If someone is allocated a MQ above their entitlement (at their request) then part of the allocation deal is that they will have to give it up should a family with a greater need require it. DHE make the rules up as they go along, I had a tiny tiny 3 bed near Aldershot with 3 kids, I could put my outstretched hands on each wall of the third befroom and the second room only had enough space for two beds at a squeeze. I asked for the empty 4 bed next door to be told it may be allocated and as I had a quarter that was all they were required to provide. I waited 6 months before requesting a move to a 4 bed, and hey presto, got allocated the 4 bed next door that had stood empty the whole time with not one workman going in to do anything. Speak to the AFF, they are very, very helpful. Also, start quoting the Joint Housing JSP at them - they love it, and it will annoy you when they tell you they don't really follow the JSP!!! Pull out that SSAFA Goldcard and use it, they need to step into the modern era and update the allocation rules.

PS BUY A TELLY!!!!!! :p

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