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CPA (Consumer Protection Act)

If the neighbour had confirmed this with you, I would strongly suggest getting this in writing from the neighbour.
You must take into account weather or not transfer has been effected?
Contact the Transferring Attorney/Conveyancer that has been attending to this deal
If transfer has not gone through yet: Get a in a professional to give you a quote for repair of the damage. Contact the Transferring Attorney, inform them of the situation, as you said since it is a latent defect which the Seller was aware of and is therefore responsible for. Give them the quote and let them claim the amount from the Seller on your behalf.
If transfer has gone through this will be slightly more difficult: Get a professional quote for the repair, you would then have to proceed to sue or institute legal action against the Previous Owners in order to claim these monies back.

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