Firstly, you must live in a pretty relaxed Local Authority area as you say the loft conversion is ‘substantial’. Generally, this would immediately fall under the requirement for building regulation approval, which in turn needs structural engineering calculations. < In itself a whole new argument.
Party wall agreements can be fraught however, the owners of the new property have a duty to inform their insurers as they have increased the size of the property. From here one of two things can happen.
1. The insurers continue to insure for buildings and contents and you are covered.
2. The insurers insist on structural calculations before they continue to insure (I accept there is ways around this).
An assessment of the foundations will be required (if there are any, it maybe with a house of that age there is simply a corbel brick arrangement or even built up from rubble!)This in conjunction with the size of the conversion (deadweight) and the underlying ground conditions will determine if the bearing pressure has increased more than the ground is capable of bearing.
Any settlement will occur quickly, but if you have clay you may get consolidation over time.
In either case, you need to get an engineer to make an assessment and not at your own cost.