Would the other end of terrace house that was suggested to you be an option? Does it have a side entrace etc? If that house is an option for you then I would go for it as I presume you still like the estate etc and just want this situation sorted. Or is it likely to have the same outcome regarding the side wall of the house (which really sounds to me like there would be privacy issues)? Also, was the house you were buying more expensive as it was end of terrace? I have noticed that this can often be the case with new developments. I hope things work out for you, its very difficult when you encounter things like this as an ftb 'cos its all completely new to you.