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Mutual exchange

Hi I’m after some advise 
I applied for a mutual exchange to a 3 bedroom house the lady that currently lives there needs to downsize and I have a 2 bedroom flat .

we put in our forms for the exchange and it was rejected because the 3 bedroom home has a dining room and could be used as a 4th bedroom but it’s a mutual exchange and the tenancy states it’s a 3 bedroom house what’s are people thoughts on this as I want to appeal the decision. 
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