We bought a house a year ago that needed gutted. Ultimately the house was supposedly "priced" to allow for alterations. However, based on the survey they valued the property at a certain price after the major urgent work was completed - the major work was significant damp inc DPC, dry rot, wood boring beetles, new electrics, re plumb, new roof. We got a load of tradesmen in and priced up all these works and then deducted this from the cost of the valuation once the work was done. The valuation less the cost of the work was significantly less than the house was priced at. Ultimately we now live here now and whilst it took 9 months of hard work we have got a great house at a fair price. After all the money I spent on the house added to the price I paid for it is pretty much the current market price for the property - I wanted a deal but I didnt want to be greedy about it.
Of course there were loads of other work that were needed above and beyond the major works (approx £40k more) including the likes of reconditioning of all windows, new bathrooms, kitchen etc....however these were priced into the original asking price for he property - like anything you buy it as you see it. If other similar houses in similar locations are going for the same money as the house is on the market for then of course you should expect to get a reduction on the price, however, if this work has been priced into the property then you are likely to be told to take a walk offer 60k below the asking price. You need to decide is the 460k reflective of the value of the property based on the condition it is currently in and if that is not the case then negotiate, but if you are getting a "deal" to allow work to be done then you have no chance.
Couple of final things - surveyors always quote worst case scenario to cover their ass so a pinch of salt there probably and the seller may not agree with what they have come up with. Finally you can't just pluck a figure such as 60k out of the air and say you want that whacked off the price. What worked really well for me was to put in writing the issues raised in the survey and then to back this up with quotes from reputable tradesmen to do the work (top end quotes obviously) and then to identify market prices for similar properties less the cost of work and bid them a price - this means they can see the cold hard reality of it all and they are much less likely to tell you to go chase yourself.
