Op, I actually posted about this a few days ago because we’re in a very similar situation — just from the buyer’s side.
We’re trying to buy a Victorian semi‑detached that was marketed as a 5‑bed with 3 bathroom ensuite. It turns out it’s actually 4 bedrooms and 2 en-suite plus an unregulated loft room and en-suite.
The estate agent originally told us the loft was a proper, regulated bedroom and that the sellers had simply “lost the paperwork”. As we’ve gone further into the process, we now know that wasn’t true. The loft was converted years ago, but it was never signed off, and the sellers have already contacted the council about it in an attempt to get it signed off but work needs to be done— because the council know about the unregulated bedroom indemnity insurance can’t be used.
Because of that, TSB have now said they won’t mortgage the property due to the unregulated ‘bedroom’.
So we’re having to reduce our offer. Not because we’re being awkward, but because we originally offered based on it being a legal 5‑bedroom house with three en-suites. Now we know it isn’t, the value is obviously lower. We don’t want to end up out of pocket later on if we ever sell, or if something goes wrong with the work and we’re the ones who have to pay to put it right.
It’s frustrating, but ultimately we’re just trying to protect ourselves from someone else’s decisions.
If the EA was honest from the beginning we would have offered accordingly and the sellers might not have accepted. We would not of ended up wasting 6 months and solicitor fees.
We also now know that the previous sale fell through as that person wasn’t able to get a mortgage due to the unregulated ‘bedroom’ - infuriating but an absolute waste of time.
Get the paperwork and prove it’s a bedroom or kindly OP say it’s a loft space and put a sofa in there and make it into a games room or something. Losing a bedroom may make it better than being completely unsellable.