Apart from asking for a RO redetermination and requesting a DHP, the only other option is to complain and ask for compensation.
From the info given, I just wonder if the misunderstanding may have occurred as follows. The clmt only requires one bedroom. But, he has identified a 3-bed property. The clmt goes to the LA saying something along the lines of "...I've seen a 3-bed house and want to know if HB can be paid on it - can I have a PTD form?". The LA officer replies, "Nah, 3-bed, £800? No problem". But, it simply doesn't cross the officer's mind that the need is only for a one-bed. Kaboom!
Of course, the above guesswork could be utterly wrong.....!
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