My boyfiend bought a 2001 golf at weekend. It has just had its mot which it passed but the garage have said the undercarriage is extremely rusty. Any ideas what causes this and any ideas of how it can be rectified? and if possible a price for repairs?

Water salt and weather causes rust
Rectify by having the underside waxoiled

Waxoil is good but make sure the underside is dry before applying or the 'wet' will be locked in. Most grunts and groans from suspension etc. 9not passengers) will also disappear after this treatment.

there is rust and rust. manufacturers do not make cars any stronger (or heavier) than they need to so any severe rust is bound to be detrimental to the stiffness of the body. there are very few unstressed panels in the construction of a monocoque body.
by the time body rust is noticed, some at least is likely to be severe. surface rust that can be seen is the least of problems so when assessing rust before repair or protection it is important to look beyond what you can see and gather clues such as seams that are spreading, areas that are heavily scaled (that might look like surface rust) and blisters under paint or underseal.
an essential part of assessing rust (and preparing for paint and wax, etc) is removing as much scale as possible. in other words hit the area repeatedly with something sharp and heavy and see how many holes are being hidden by this crystalized metal. a needle scaler is the best tool for the job.
do not rely on wax or underseal alone; always paint first where you can. do not expect quick results as preserving a car is a long job. do small areas thoroughly; take a wheel arch at a time and then a sill, then another panel and so on.
i did a respectable looking astra and found 27 rust holes after descaling it. results are initially disappointing. the moral here is do not buy rusty cars! if you have a treasured car to preserve then get it done before it needs welding because it often leads to electronic problems after a year or two. after welding always properly protect both sides of the weld or be prepared to get it done again in a year or two.

Your car needs a major body repair job. Anywhere in the world, a major body repair job is very expensive; sometimes it costs more than the acquisition cost of the rusty car. You have a lemon...the best thing to do is to return the item.