Buying house with failed loft conversion.

[Mougly]

We put an offer on a property in a heated London market. They've had an offer fall through last summer as buyer couldn't get the mortgage so really keen to sell. It's a 2 bed Victorian with a downstairs bathroom. Loft conversion didn't pass inspection but looks like a sufficient third bedroom ensuite. They've taken out the chimney breast and the kitchen bathroom single storey extension at the back has a flat roof with some damp marks on bathroom ceiling.

There is a building control application for Cavity wall insulation with status: INV. Does anyone know what this means? Not sure if it's done or not and on what wall.

Does anyone know what could be wrong with the loft for it not to be approved? Worst case/best case senario? Windows are small but the staircase up is full size.
Should I be worried about the extension roof being flat? And how much can it cost to have the chimney reinstated? We are keen to have a real fireplace.
Can't get hold of the planning office and my experience so far is that they will move on to the next offer if you ask many questions. Really frustrating but feeling lucky they are even considering us with so many people offering on each property. Would you buy a 2 bed house if there was an unapproved 3rd bed in the loft? I believe it's going for a 2 bed house price.

[LaurieFairyCake]

Yes if it's going for a 2 bed house price

Sounds a bargain