So a dormer loft conversion costs the same as a side extension? It sounds like you'll be getting more space for the side extension for the same amount of money then. Have you had a look at other bungalows down your road or area that have had extensions vs no extensions and see what they have sold for, then you can see if it's worth it but who knows what the market will be like in a couple of years time. In terms of appealing to more when selling, people probably would prefer bedrooms upstairs but if bedrooms are larger and downstairs is huge it will be more attractive to buyers ( I think ) especially if there is a large family. Lots of new builds have a bedroom downstairs so it's not unusual plus families considering a bungalow won't be looking for the norm in terms of layout so 2 bedrooms downstairs is fine. You can also ask your estate agent that sold you the bungalow, get their thoughts on what is attractive to buyers, I'm sure they'll be helpful in case you'll use them in the future :-).

I'd start by finding out if the foundations for the ground floor extension will support another storey, or you could build our further.

I find your room really, really cosy! It’s lovely. Although it is neutral you have light and dark elements which stop it looking boring. It just looks like the walls have been forgotten, so some art above the bed, or on any other blank walls would look great. A lightweight canvas rather than a heavy framed print. Panelling is beautiful but unless you do it yourself then it can be pricey.

If you could remove some or all of the cupboards in and around the kichen and enlarge this room this could make a sunny second bedroom, then combine bed 2 and 3 as a sitting/diningkitchen and have an inline kitchen on the right wall