It is 12 years but it is a lot more complicated than that and I'd get something sorted before you sell so it does not cause problems and delays then.
If the 12 years has not yet accrued, you could try speaking to your neighbour and showing her the deeds and asking her nicely to remove the fence as it is on her land. I'd make it clear that it is your land and you do not consent to her using and fencing part of it. Maybe put it in writing by registered post if she is being difficult and make sure you keep copies of everything.
Just to warn you though if they have had possession of the land without consent and showed the relevant intention and such for over 12 years they could try and claim it although you can contest this if you have the relevant grounds.
If your land is registered (ie has a title number) try this...
http://www.landreg.gov.uk/assets/library/docum ents/lrpg004.pdf. It is a bit legal but should give you a general idea as to whether they have any claim. If unregistered let me know and i'l direct you to the unregistered land guide.
If there are still problems take legal advice, possibly a letter threatening for example injunctive proceedings.
Best thing is to try and sort it amicably if at all possible as you are neighbours and you don't want any dispute ongoing when you sell. Maybe you could compromise depending on what the land is used by her for such as granting a licence for specified use so her use and occupation is formalised and can be terminated if needs be.
If it's your land then fencing or similar it off is a wise idea to assert your reclaiming of ownership, you could put a means of access in such as a gate to which she is given a key.
Depending on the size of the land it could add value to your property and attract more buyers and you don't want