Congratulations on your new home. I think you have been very sensible to live in it for a year before starting your decorating, it has given you time to consider the lighting and aspect of each room in all seasons as well as time to evaluate how you want to live in your home and exactly what you need. The lounge does look very big and bulky and will definitely dominate the room, so I would keep to the lighter colour. Don't worry about the kids and dirt - as Kookykaren said, leather cleans easily - sharp objects and textas are your bigger worry regardless of what colour you choose. Laying newspaper on the floor to the size of the lounge is another way of checking how it will look as it gives you a better indication of bulk than tape. I would keep your ottoman simple (one with storage is an excellent idea with the children), just a tone on tone fabric or a pattern using the colours in the rug on the floor of the photo of the lounge. I don't think you have room for too large an ottoman but I would have a square one made the same height as the lounge so when just you and DH are watching TV you can push it against the other end of the lounge and both have a chaise. You can then bring some colour with art work or some patterned cushions on the lounges.

2 sofas look great when you are needed extra seating for people but i really like the armchair /wingchair idea with a sofa. As you have chosen a modern take on deco i would look at a side table that encumpases that style but as said functionality is key. No good having one sofa if you have 5 guests. It sounds so beautiful so keep moving with your ideas and remember that sometimes ideas can change with different advise but you have to love it

Hi Katrina, Overall the sofa looks just too big, even though essentially it fits on paper. It would be better to go with a 2800 L shaped sofa with chaise and have the chaise side running by the wall so it's a bit more open as you walk in. And if you make the chaise 1600/1700 then you have more room to pull the sofa a bit closer to the TV and make space for your dining table behind. Or pop the chaise on the side closer to the kitchen then you may have room for an occasional chair on other side by the window. Does this make sense?

Do you have a picture of the room? If you get a tan leather to go back with the grey, I would want to see cushions, throws, a rug and artwork that have lots of grey and tan to link the colour palette together. If you go for fabric, then your choices for decorating the space can potentially be broadened to your imagination... depending on what else is already in the space (that's why a photo will help).