Adverse possession of unregistered land advice

Hello,

First time buyers here.

2 months into the process of buying our first house.

We received the title plans from land registry about a month ago, and straight away could see the boundaries were wrong. We told our solicitor who queried with the other side.

On Friday, we received a message from our solicitors saying that the sellers can now confirm that, the area in question isn’t actually part of the legal boundaries, and they don’t own the land. (The area marked in blue)

They have told us they are willing to provide a statement of truth to say they have occupied the land for the last 5 years, with fencing making it exclusive to their garden. They are also willing to provide an indemnity policy.

Obviously as first time buyers this has been massively confusing.

I understand as it’s unregistered land, we would need 12 years continuous occupation, so we wouldn’t be able to apply for another 7 years.

Where do we stand if there is actually an owner of this land?

Where would we stand if someone tried buying this land?

How much would the rough costs be for an adverse possession, when the time comes?

Could we use this to renegotiate the price?

Any help would be appreciated.