Should I be worried?

[Muminthenet]

Our mortgage was approved in October and the bank did an on-site valuation. We subsequently had a full buildings survey done and an issue was identified with a damaged wall and fence that belong to the neighbours. My conveyancer informed the bank and the bank has requested to see my survey report and had said they will not lend until the wall is repaired.

The vendor is prepared to go it alone and fix the wall and fence. I’m worried about the whole thing. Everything was going along so well.

But the wall is going to be fixed. I'd be more worried if the vendor didn't want to help to address the issues. Sounds like there's no reason this should not now proceed? Worse case scenario you have to negotiate on cost of a professional builder to fix the wall, best case the vendor does a good job.

I might be unnecessarily worrying. It seems to becoming complicated.

Do the neighbours agree to the wall being fixed?

But @Muminthenet, it's really not complicated.
If you don't pay your mortgage the only way the bank can get their money back is to repossess the house and sell it. It's not worth as much as you are buying it for with the damage, so they are insisting the damage is fixed before they invest in the house.