If th house is as good as you originally said for meeting yor requirements I wouldn't dick about over a few £k, go back with an asking price if they take off market.
the confused people are ace - just keep looking pal, something else will come up.
Aye, but then there is always the chance. Alternatively, there could be something that comes up without all that, but a bloody big bit of land to the side/back that you could then knock something up on.