I recommend sitting down with a kitchen designer, they would be happy to guide you through the whole design process and most will do it for free.

In a room that size, you have plenty of scope. I always think an island is a great additional workspace, and having part of it as a breakfast bar makes for a very sociable space. I'd go for an Lshape with the sink on one leg and hob on the other, an island towards the middle of the room, and the dining table in front of the big doors. That's very basic layout, but what you really need to do is think about the way you'll use the space. How many people eat there? Do you cook a lot? Do you have guests over often? What do you need to store- lots of fresh ingredients, dry goods, frozen foods, baking equipment? Do you want a walk-in pantry? What type of fridge? Are you tall/short, ie will overhead cabinets work for you? What items need counter space? Toaster, coffee machine, mixer, microwave? What kind of oven/hob do you prefer? Will you do other things in the kitchen besides cooking and eating- laundry? Office type work? Kids playing? Have a think about all this, and browse through kitchen pictures with an eye on what would work for you in a practical sense. A well laid out kitchen is the most important thing in the house IMO !!

We had a similar project and gutted the house. Rewire replaster all walls and ceilings. We restored the original parquet flooring and then new carpets everywhere else. Knocked through between kitchen and dining room, new garage roof. New doors and work surface but kept the original kitchen units. Kept the bathroom but put in a new floor. Did this for about £10k. Now 18 months later we're looking at extending the kitchen diner into a big open plan room going out the back as you have suggested but also out to the side. Our neighbours have done similar and we think we can get it done for about 30-40k not including the kitchen. The side extension means a fair bit of structural steel so if you don't do this then it saves a fair bit - our other neighbours have done this. We want an open but defined space so we're looking at keeping a pillar (also cheaper) then having an L shaped kitchen diner around a more relaxed sitting and entertaining area. The idea being that for dinner parties you mill around and have drinks in here before going to eat. Also can have friends round for coffee etc while the front living room remains the primary TV watching area. We'd keep a small boot room off the back for the dog, a pantry in the middle and a toilet at the front. See below for some pictures that illustrate our plans. These are mine and just awaiting our architects plans. In summary I'd get it up to a basic standard until you've got a bit more then go big, although as you say with your cheap labour you might get what you want for the money!

I wouldnt recommend putting a rug on to a wooden floor as if you change your mind in years to come you will create a 'framed floor' using clear oiled / lacquered oak / ash for example as it deepens in colour with exposure to sunlight / daylight. A clear Oiled Oak floor will gradually darken / become more golden with UV exposure. There is a way around this though if you choose a wooden floor that has been stained... stained dark, white , light or grey. The stain acts as a sunblock and stops the patina / colouration occurring. The floor below is the same as the floor above but it has been 'antiqued' with a rich brown stain and will remain the same colour if you cover it with a rug. Im biased but engineered wood is warm underfoot , hardwearing and versatile ...if you change your decor in years to come you can sand your floor and stain to complement a new scheme. If you use the same floor material throughout it creates flow and especially using lighter timbers /lightly stained if you are trying to ..maximise space as darker colours minimise spaces visually. The floor below is oour most popular floor - white stained ash . Very durable and gives a scandinavian style feel...this floor too you can place a rug over and it will not change colour . American White Ash engineered flooring creates an airily open feel. Anyway good luck and hope I havent confused you...floors and floor transitions are notoriously difficult to plan . Best Wishes, Charlotte