For a start, from what you have said this is a clear case of mis-selling.
What you and the housebuider signed at the time of reservation is clear.
Add in the fcat that what was actually built doesn't even have planning permission adds more to your case.
The Consumer Code for Home Builders is probably the place to go. The maximum payout is only £15,000 and very few get that, but I think you have a strong case. It costs just £120 to make register a complaint and it is quite quick. You should add the registration fee to the amount you are claiming.
http://www.brand-newhomes.co.uk/consumer-code.htmhttp://www.brand-newhomes.co.uk/consumer-code-dispute-resolution.htmhttp://www.brand-newhomes.co.uk/claiming-compensation-adjudication-scheme.htmAlternatively you could join forces with your neighbour and take legal action.
Contact give Timothy Waitt Solicitor & Partner at
Anthony Gold Solicitors
The Beehive Coffee Tavern
496 Streatham High Road
London SW16 3QB
DD 020 7940 4090
T 020 7940 4000
F 020 8664 6484
DX 58604 Streatham
Website anthonygold.co.uk
Twitter @Anthonygoldlaw
Why haven't you named your housebuilder?
It helps warn others and makes it easier for me to advise other buyers in similar circumstances.