Sale agreed on a house with potential subsidence

renorenoreno

Sale agreed on a 4 bed semi d in Dublin built in the 1950s. The house has been well cared for but probably hasn't been updated since the 70s. We did a survey after going sale agreed and the surveyor mentioned signs of differential settlement in the kitchen. This is a small 1 story room at the back of the house which we were planning on extending anyway so we didn't mind too much having to knock this room down. He also noted potential signs of subsidence in the main house - very small cracks that we couldn't even see in the photos attached to the report. We initially thought the surveyor was just being extra cautious and covering themselves but now the vendor's solicitor has noted to our solicitor that the vendor was aware of subsidence and informed the agent of this. The vendor's solicitor claimed that we informed about this from the outset before bidding which we were absolutely not. We are getting a mortgage on the property and the bank is doing the valuation report soon but we have not mentioned anything about subsidence to them. The house is not in an area that would commonly have subsidence.

We are sale agreed at the asking price. The asking price was more than what we thought the house was worth compared to similar houses in the area which were sold in 2022/2023. So there was definitely no discount accounted for this potential subsidence. Any recommendations on how to proceed? Negotiate a discount on the house / pull out etc