Thanks for your enquiry.
All Developers ask for a reservation fee of £500-£1,000 and their reservation agreement will normally state that this sum is not refundable in the event that the Purchase does not proceed. (some agreements state that half will be refunded, but I am guessing your Son's agreement does not state this). Therefore, as the matter is not proceeding, they are within their rights to retain this sum, despite the reasoning behind why your Son can not proceed.
Although morally they should refund your Son, legally they do not have to.
If your Son's Solicitor has been unsuccessful at getting them to take the moral stance, there is little you can do, unless your Son wished to complain and make a pain of himself directly to any site office they have on the Development, if indeed there is a site office!
I am sorry this is not the answer you were looking for.
If I have answered your question, I would be grateful if you could leave positive feedback.