4. Legally speaking, it is important to determine where the boundary is. This is because in England & Wales, the registered title is paramount and determines where the boundary lies. Over 89% of land in the UK is registered land, so, given that your house was sold recently, my guess is that it is registered land. In which case, it is not possible to claim areas of ground by mere possession, or squatter's rights. So this is why you get a survey done.
5. When you have the boundary surveyed, then you need to show this to your neighbour, as this will govern the issue as to where the boundary lies. Legally speaking, the fence will have to go in this position.