This was one of the few episodes that I watched of the new series, and I do remember that the house was some way into the forest. They most likely didn't see it because they weren't close enough to it. They also ran a bit before they got to the house, and the forest was thick enough to obscure it.
As to why the house looked so bad only after a (presumed) 20 years, it's probably to add to the atmosphere. At first, you're led to believe that there's some ghost/ supernatural stuff going on in the house, but it's really just Espurr being lonely and wanting friends. If you want an answer that caters as an "in-universe" explanation, then I have to say that we don't know the weather surrounding the house, nor the material the house is made of and how it reacts to the weather around it. Also, I didn't think that the house looked that horrible? It was just the abundance of ivy growing on it, which will grow quickly if unattended.
I agree that the interior was too spotless, but I have that down to Espurr. Espurr exhibited high psychic abilities and prowess, and probably kept the house dustless by himself(?), whether consciously or not, in wait for the old lady to return. We saw that Espurr was able to switch the lights on and off by himself as well, and also slam the windows shut and lock the doors, so I don't think retaining the interior of the house is beyond his powers.
