Mortgage Offered, Valuation is as per sale agreement but additional retention advised

bendyspoon

Hi all, FTB here and things have gone a little too smoothly to be true with our first experience of buying a house.

Me and my partner had our eye on a run down property a couple of doors from where my family currently live. The house is now empty and has been for around 2 months, its in need of a pretty decent refurbishment of which we are going to do ourselves as we have done DIY things for the family before so feel we are more than competent to do the work required.

To cut a long story short; we we agreed the sale (£95,000); the mortgage offer was given subject to a satisfactory valuation report; the valuation came back saying the property in its current state was worth £95,000 and with essential works of timber damp report and a house rewire required the house would be worth £98,500; a retention amount of £3,500 was advised by the valuer but the bank (HSBC) have never re issued a mortgage offer.

Questions:

If the bank is only lending me £95,000 and the house in its current state is worth £95,000 why would they require a retention amount?

Not issuing an alternative mortgage offer after the valuation report; Does this mean that they aren't applying the retention?

In anyone's experience, would you call the bank and ask the direct question if a retention is to be upheld?

thanks for any help you may be able to offer on this one.