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I would be tempted to say something like:
‘The house is X years old and we have kept on top of maintenance during our time here and carried out X works in line with relevant regs at the time, if you want the house it costs £X - the price reflects the location, size, style and condition. We are not able to complete until our chain completes on X date.’They’ve fucked their housing situation and are trying to make it your problem.
If you have made up your mind that you are comfortable with walking away then you should state your terms for a successful sale, eg
Feels like they’ve played fairly hard with you and it sounds like you’ve been willing to work with them but now you’ve lost patience. It’s fair at this point to side step any unresolved demands from them and simply state your terms; do they want the place or not?