If I were acting for the purchasers, based on what you have posted, I would simply get permission from my clients lender to put a qualification on the title as regards the outhouse and advise my clients of the legalities and the fact that it will forever crop up on a resale. I would not however advise them to be put off by this, it happens every now and then and is not the end of the world.
Keep plugging to get issues resolved IMYO
Think the problem is that retention for the outbuilding has been refused. So unless there's an expensive and lengthy appeal...
One application has been refused and one is subject to conditions which the OP says he has complied with. It should be possible to get this file closed with retention granted.
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