Agree with all 3 above, immerge - yes have pantry next to fridge and take bench all way to wall, so longer, take away those cupboard on the wall above bench to extend bench space, ea100 - yes you could extend bench so wider. If you have the budget I would try to change all the laminate to another more neutral colour like a very pale grey or antique white. Love bbean's suggestion of a taller table that can go under the bench or even be turned at right angles to the bench when you want a more sophisticated table arrangement or 4, using bench as extra serving dish area. Occasionally I will put our table under our kitchen bench if I want to serve food as a buffet for visitors - works very well - have done this even for a tupaware party and then all chairs faced the demo area, worked well.

chookchook2 - we have linoleum in our kitchen. 10 years on, still looks great, easy to clean, forgiving underfoot and dropped items don't always break :) Love it so much, we will be using it throughout our new beach house (except bathrooms). Try searching Forbo Marmoleum - the colours alone are eye candy, and you may find a link to a state rep.

What is the condition of the current bathroom and kitchen? Also what do the estate agents in your area say? ie will an additional bedroom and ensuite add value, or will an extra family room add better value? or will just a cosmetic upgrade be better?

Thank you so much for everyone's thoughts, it has honestly been very helpful. We are going to consider going right across the front of the house and over that problematic front door. Going to consider going across with the same space as we originally had going straight out. I'll keep everyone posted as I so appreciate all the help!!