Here at WTE Ltd. we deal with this type of situation every day.
Wether it causes actual legal problems depends on the actual wording in the 'Rights reserved for transferees' section in the Third Schedule' of the Title Deeds. Ask your Solicitor to investigate.
Wether you have any actual problems is another matter. Only this morning we had a call from someone who bought a house with their septic tank on someone elses land. The tank needs replacement as it is leaking, but this means making one devil of a mess of the neighbours garden. Although they have the right in the above Title Deeds to do this by Law, it has almost got to the 'Shotguns at Dawn' stage. It will go to Court. Not a nice situation and expensive for everyone involved.
Try to sort all matters pertaining to this septic tank out with your neighbour BEFORE you purchase and remember - when the tank or soakaway fails, and they all do eventually, it is YOUR land that will be contaminated, not his and you may find it difficult to get him to rectify matters without going to court. If his soakaway is also on your land, then it is a bigger problem as soakaways fail with monotonous regularity. The septic tank then 'backs-up' and you could have raw sewage flooding on your land. Septic tank effluent cannot be discharged to a ditch, so check that neither of them do as the fines for pollution are prohibitive.
The best solution would be for him to put a tank on his land instead, but as this is likely to cost a couple of thousand pounds, he might not be eager to do so.