The land would currently be categorised as 'agricultural', in Planning terms, so all you could legally do with it would be things consistent with agricultural use: growing foodstuffs keeping chickens, perhaps.
You certainly couldn't extend the house onto it without Planning Permission (even if the extension would otherwise be classed as Permitted Development).
The Planning rule you mention is that if you can prove that land has been used for an unauthorised purpose for at least 10 years, that use becomes lawful (and you can apply to the Local Authority for a 'Certificate of Lawful use'). Do bear in mind that this is not the same as having Planning Permission for that use, though - it's more an immunity from enforcement action and only remains lawful for as long as the use is continuous and unbroken.
Planning enforcement tends to be reactive rather than proactive - Local Authorities have neither the will nor the resources to send their Enforcement Officers out cruising the streets looking for breaches of Planning rules - so whether you'd get away with simply absorbing the land into your garden largely depends on whether a neighbour decides to report you.
If you are paying money for the land, I personally would not wish to do so unless I was certain to be able to use it for what I wanted, so if it were me, I'd agree a price with the farmer subject to gaining Planning Permission, then submit the Planning Application (which you can do without owning the land). If you get your Planning Permission, the purchase can go through; if not you walk away with minimal financial loss.