Subsidence?

Wow. Interesting stuff.

It's not just horizontal shrinkage movement as implied by them though, which wouldn't be much to worry about - it's vertical, the far wall of the extension is sinking into the ground, the whole thing is tipping away from the main building. It needs a lot more than a bit of patching up, it's unlikely to be just in the render.

Be very grateful it happened just now and not just after you bought.

As it's current, it's probably still moving and could get a lot worse.

Definitely stay well away, you've dodged a bullet.
 

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