I think the kitchen diner area is ok although, if you're concerned about light levels, I would def consider having double glazed doors to the lounge where you've marked on a wall. Could you use the left hand side of the utility as a shower room, bringing the wall in line with the wall of the garage which would still give you outdoor access through the utility.

It does indeed look like a great project. Going with what @Louise Ang said, you’ll probably be better off keeping it one storey and reconfiguring. I’ve been playing around with your plans (for fun!) and have posted below a layout option that gives you two bedrooms, a nice sized entrance/hallway, utility room, large shower room and living / dining / kitchen space. I kept as close to the original plans as possible (keeping internal walls if I could) and squared off the rear of the bungalow, only encroaching 20cm or so into the garden beyond the original plans. If you do wish to go for a loft conversion further down the line, you could potentially put a staircase in the hallway. Apart from seeking professional advice (architect / building surveyor) why not also have a look at other similar properties for sale on the same road / area and see what they have done with the layout? It’ll give you an idea of what is structurally feasible and what developments the local council is permitting. Good Luck!

I wonder which side is attached and what the upstairs layout is like. I'd be looking at a long term solution and the loo seems to be in the wrong place. Would it be possible to move it to under the stairs where there's storage (or is that a very used part of the family room?) If not would you be interested in rejigging your kitchen to put a larger loo where your kitchen sink is and access it from the hall? That would mean having to move the sink down to the other end of your kitchen and losing the front window....  In terms of the family room door alone, I'd look at taking a little bit of your sitting room into the hall, turn the bottom few stairs towards the front door to allow you to put a fab glazed door flush with the supporting wall.

Your plan won’t result in savings. You know you need to build additional bedrooms in order to add enough value to the house to justify the spend so you have to build at the side. Personally I think you should build smaller and save £16k-20k. I think you should delete the Ensuite until you can afford it and save £5k now. Then I think you should look at the specification. The green roof suggests green credential such as ASHP, underfloor heating…… the roof and the heating system could be swapped for more conventional choices for a cost saving. I think you should be considering a used kitchen for a cost saving. And while at it get advice from local estate agents- I suspect fewer but bigger rooms will add more value.