You know, Alipetecampbell, I think a lot of good could be done by simply not allowing houses to be built unless they're designed by a qualified architect and signed off by a qualified engineer, and built to minimum standards that ensure proper passive climate control (insulation, glazing, orientation etc.) and social linkage issues - let's ban the food desert and the nappy valley. Developers have a vested interest in building cheap, and those rubbish houses sell because (a) there's not much else on the market and (b) superficially they look okay. You'd argue that what I'm proposing would raise housing costs, but let's stop making billionaires of developers, let's stop councils from charging silly money for planning fees (eminently doable if housing is professionally designed) and, as I have said above, use less land for more housing AND more greenspace too, and the cuts in cost these measures would create could go towards making all houses better.

Extending out to the side was also our initial idea but we thought it might be more cost effective to relocate areas within the current floor plan. An architect friend of ours also thought for the space we would gain with a side extension it wouldn't be worth it. I think if we were to extend to just past the first set of french doors it would look like the photos you have shared. Love them! Now you've got me thinking of extending again, hehe. My husband really wants to unite the split stairway and I fear that will be quite costly.

Thanks for these wonderful comments everyone! These are really good and provide me with some great starting points. A few of you mentioned budget. We are thinking 300k to 400k would be good, but I'm not sure if this is too much or too little. We are based in Melbourne if that helps. We will definitely engage a building designer rather than architect mainly due to costs. The suggestion of a brief is good so that we have a clear idea of what our goals mad requirements are. Neighbour wise we should be fine :) I hadn't considered asking them if they were interested in renovations as well. Wow, that plan looks amazing! Can't believe that you create that so quickly. I'm sorry I couldn't get to answer your questions in time. The easement is for drainage. I believe there is a large drain likely sewer line running down the side form memory. The walls are all brick. Double brick. Roof is tiled and floors are hardwood timber except in existing kitchen and toilet areas. I should have added we plan to knock down the existing garage and use the space for backyard. Can't build on it because of easement. The land slopes very gently from the front to the back. The height of the floor at the dining room I would guess is 50 cm higher than the ground outside. I can try and take a photo today. We were thinking we would try to keep as much as possible of the existing walls, like you have suggested except the bathroom laundry kitchen and possibly dining. although it would be nice to have the main hallway width wider. but I can see then that you would lose quite a bit of space.

I really love the work of Ross Chapin, he has really influenced my approach to homes in general! He is a US (i think) based architect who champions small homes and has a concept called a pocket home. I've read a lot of his articles and he likes homes that are homey and cottagey and small neighbourhoods with common parklands and great greenspace access. One feature of his homes is they are typically 1-2 bedroom a thing he often does is replace what would in other homes a whole room with a nook. So for example, a hallway might be extra wide but have a nook for an office that could be closed off with a sliding door into a spare room. Or an attic space that can sleep grandkids, dining nooks off the kitchen so entertaining is possible, like an oversized bay window. Decent living spaces. His designs are worth a look at to get some ideas. https://rosschapin.com/plans/small-houses/ I've also stayed at a newly built unit for an elderly person. There was this large foyer space at the entrance with an extra wide door that was level with the paving, no lip at the entrance. It was designed so ambulance access would be easy in an emergency. The large foyer had cupboards with a laundry and storage, and then there was a bathroom directly across, again for easy emergency access. There was a phone in the bathroom too in case of falls. The whole area was tiled from door to bathroom for easy maintenance and access. The kitchen was simply run across one wall of an open plan dining and lounge area with like a corridor of tiling to designate it as separate. You can use flooring changes to create different spaces. It there were no awkward pokey spaces and it was the easiest place I have ever stayed for cleaning and organising. There is a universal access guideline, its worth checking things like bench heights etc... https://www.architecture.com.au/wp-content/uploads/Universal-Access-Policy.pdf