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Damp in rented house for 17 months. Do we have a claim?

In short, we've had damp from the moment we moved in (the wall was soaking the day we arrived)
Even though they have done 2 or 3 bits of work to try and solve it while we have been here (always after a long time and at our inconvenience), nothing has solved it. There hasn't been a point the whole time we've been here when there hasn't been damp. 

It's in the living room, the hallway and one of the two bedrooms.
It causes paint to peel away and mould to form, even though we are constantly cleaning it.
We moved here with a baby and have had another while living here. She has been hospitalised twice with respiratory problems.

We've also had at least one instance where the water was causing an electrical burning smell and they didn't send anyone to help. 
We've always been patient with them, but they've treated us terribly. So we asked for a discount for the rent we paid over the time we've been here and they said no because they have been trying to fix the problem. 
So, we want to escalate it. 
Just wondered if anyone can tell us- do we have any power? And what are the steps we need to take?
We're thought first thing to do is contact the council. Oh, and we are going to give our notice and leave asap anyway. 

Thanks guys!
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