Thank you all for the comments!! It's really helpful! After few days of thinking and rethinking, plus doing experiments in the space, I think we will go with this: I am aware that this leaves us with small kitchen, but more then anything I hate being in a space with too much heavy stuff. For two of us, plus extra couple here and there I think it could be enough if we avoid single purpose appliances. If we feel that we really do need more kitchen space, I will move table to center and add another line of elements (galley kitchen).

I would do sink on back wall in front of window. Stove on the side wall that has the window. Could do 2 windows either side of stove. With stove on side you can still chat whilst cooking. Tall storage on opposite wall and fridge

Kate - Whilst I appreciate moving the door would be a great idea, it joins up to our laundry and the door is directly across from the laundry external door that leads to the side garden. I will take photos to show what I mean. Juliahocking - thank you for your suggestions. I am inspired by adding in cupboards/pantry on the opposite wall. Regarding flipping the kitchen 45 degrees, I have added measurements to clarify the space, and if I understand you correctly, there isn't enough room to flip the u-shape (although it is a great idea). I have added another (old) picture that shows the entry door, and next to the entry door is a sideboard/side shelf - this is where our butchers block/island is situated - so gives you an idea of the limited space. Old photo: Entrance door on the left. Next to the door is where the butchers block sits, underneath that painting.

I would ask for the wooden architraves to be removed and the window surround to be finished as just square plaster. Then finished with paint that matches the cabinetry and/or bench. It’s the architraves that make it depart so much from your inspiration pic.