I believe I have the solution.
Your joint aspiration, if you marry, should be that you (mostly he but that's the nature of marriage) buy a big family house for the family, plus a little bedsit / flat bolt hole, if a shed / study / attic really won't suffice.
You will need some understanding and agreement about when retreating to the bolt hole is needed and appropriate e.g. Not to skive out of doing the washing up, or to storm out of an argument but perhaps, to go for a couple of days here and there, mutually planned and agreed so as not to cause domestic problems. E.g. If you've planned to go out, with him staying in with the kids, you need to have confidence he'll stick with that a arrangement (however difficult the DCs are being that day, or chaotic the house).
I think if he wants to move up and rent, to try out being your BF at closer quarters, fine, that's all on him, he's taking the risks job-wise but he's still got a house to go back to if it doesn't work out.
But, I don't think you should agree to a longer-term aspiration of separate living, with you running the family home. That's neither one thing nor the other and, even if he pays board, seems likely to add to your domestic burden, to his benefit.
I can see the benefits of his having separate living space - for your DCs. If he doesn't want to be a live-in 'dad' figure and might not blend well into your family, having him as your semi-detached partner, even husband but not 'dad' could work. That's where pooling your resources and buying a family home comes in.
Otherwise he's just your gentleman caller. They don't stay every night. (And if he wishes to, wouldn't another bathroom be handy? It's daily pressures like sharing bathrooms that are family life. He becomes part of it, or he doesn't).
I'd suggest setting a review date for the short-term trial, after which longer term changes will be made, or, it's over. Be clear from the outset about what sort of longer-term arrangements would be acceptable to you, so he cannot possibly claim you misled him when he moved.