There are only certain grounds on which an exchange can be refused, these are laid out in schedule 3 of the Housing Act 1985:
The Landlord has obtained a court order or has given notice of/commenced proceedings for repossession of your home.
The property you propose to exchange to is substantially larger than your needs and the exchange would result in Under Occupancy.
The property you propose to exchange to is too small for your needs and the exchange would result in Overcrowding/Over Occupancy.
The existing tenant obtained the property through his/her employment and it is located within the grounds of a building not normally used for housing purposes.
The Landlord is a registered charity and the applicant would not meet the criteria for assistance from that charity.
The property has adaptations to suit the needs of a physically disabled person and the applicant would not require those adaptations/is not considered physically disabled.
The Landlord is a Housing Association or Trust that accomodates only applicants of a specific group and the applicant does not meet that criteria.
The property is of a group that are normally occupied by tenants with special needs, there are special facilities nearby designed for persons with the type of special needs and the applicant does not require that type of specialist accomodation.
The property is managed by a management co-operative and the applicant is not willing to join the co-operative.
It is established that; the applicant has exchanged his home with another tenant and either paid money to, or received money from, the other tenant as a condition of making the exchange. - This may result in your Landlord seeking possession of your home
What the law says:
SCHEDULE 3 Grounds for Withholding Consent to Assignment by Way of Exchange
Ground 1
The tenant or the proposed assignee is obliged to give up possession of the dwelling-house of which he is the secure tenant in pursuance of an order of the court, or will be so obliged at a date specified in such an order.
Ground 2
Proceedings have been begun for possession of the dwelling-house of which the tenant or the proposed assignee is the secure tenant on one or more of grounds 1 to 6 in Part I of Schedule 2 (grounds on which possession may be ordered despite absence of suitable alternative accommodation), or there has been served on the tenant or the proposed assignee a notice under section 83 (notice of proceedings for possession) which specifies one or more of those grounds and is still in force.
The accommodation afforded by the dwelling-house is substantially more extensive than is reasonably required by the proposed assignee.
Ground 4
The extent of the accommodation afforded by the dwelling-house is not reasonably suitable to the needs of the proposed assignee and his family.
Ground 5
The dwelling-house:
(a)forms part of or is within the curtilage of a building which, or so much of it as is held by the landlord, is held mainly for purposes other than housing purposes and consists mainly of accommodation other than housing accommodation, or is situated in a cemetery, and
(b)was let to the tenant or a predecessor in title of his in consequence of the tenant or predecessor being in the employment of:
the landlord
a local authority
a new town corporation
a housing action trust
an urban development corporation
the governors of an aided school
Ground 6
The landlord is a charity and the proposed assignees occupation of the dwelling-house would conflict with the objects of the charity.
Ground 7
The dwelling-house has features which are substantially different from those of ordinary dwelling-houses and which are designed to make it suitable for occupation by a physically disabled person who requires accommodation of the kind provided by the dwelling-house and if the assignment were made there would no longer be such a person residing in the dwelling-house.
Ground 8
The landlord is a housing association or housing trust which lets dwelling-houses only for occupation (alone or with others) by persons whose circumstances (other than merely financial circumstances) make it especially difficult for them to satisfy their need for housing and if the assignment were made there would no longer be such a person residing in the dwelling-house.
Ground 9
The dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons with special needs and a social service or special facility is provided in close proximity to the group of dwelling-houses in order to assist persons with those special needs and if the assignment were made there would no longer be a person with those special needs residing in the dwelling-house.
Ground 10
The dwelling-house is the subject of a management agreement under which the manager is a housing association of which at least half the members are tenants of dwelling-houses subject to the agreement, at least half the tenants of the dwelling-houses are members of the association and the proposed assignee is not, and is not willing to become, a member of the association.
Information is provided for guidance purposes only, we always recommend that you seek professional legal advice where appropriate