Stay and be skint or move and have spare cash

[Snorkers]

Really agonising over this, hoping for advice please

Moved to a large 60s property in a lovely well connected village in Sussex. We completely and foolishly maxed ourselves out (first time buying on the open market) and now can't afford to do anything, including home improvements like new kitchen, windows, carpets and fix a never ending torrent of bodges we're uncovering that were done by the previous owner.
Heating is high due to us being on oil/no mains gas but we do get solar payments which are c. 2k a year.
The garden is also huge and again lots of money needed for new plants and fixing an old pond.
There's just myself and husband, no kids, we're 40 ish and owe c. 265k to family but no bank mortgage, house is worth c. 550k.

We absolutely love the peace and quite in the village and generally keep ourselves to ourselves, we are not massively into going out-out (which is good as we can't afford to any more anyway!) we're at least 25 years younger than everyone else here tho. I also miss having a character property but do like the fact all the rooms are big here.

Our options are:

1. Work like crazy and live like paupers for c. 3 - 4 years and pay off part of our debt which will free up c. 800pcm, and possibly get a lodger too. We'll then have an extra £65k equity in the house not taking into account any increases in prices

1. Tart the place up, sell up in the Springtime hopefully and move somewhere smaller and more affordable in one of the towns nearby, we'll be c £1k a month better off but won't benefit from the extra equity. (Places rarely come up for sale in the village in our price bracket)

I feel so sad to think we'd have to leave the beautiful village as it's lovely but i think we may not have thought this through properly. I don't want to make another mistake by quitting if we should stick at it though, a bit of pain now for gain later.

Move. You could own a house outright.

Move, you sound as tho life in this house is making you unhappy.

We are moving to a cheaper area because although our current mortgage should be affordable, we are skint the entire time and sick of it.

I can't wait to be able to afford stuff and live within my means!

Hi, thanks everyone.
I really really don't want a mortgage as we'd pay hundreds of thousands in interest over the years which is crazy, i am self employed and i'm not 100% about the security of my industry over the next few years so would struggle with both getting a good mortgage and also repaying it - occasionally when we have a bad month my relatives are happy for us to miss odd payments and I donlt think a bank would be so flexible
HOWEVER! we came up with what i hope will be a cunning plan, we have two huge bedrooms and a massive bathroom upstairs, we are going to convert one bedroom to a kitchen/sitting room, have the other as a bedroom and rent out our first floor as a sort of self contained unit with own private bathroom and all bills included too. We'll pay one part of the loan off, reduce our payments and then save for renovations. We'll also have a bit for ourselves each month.
There's enough room for us downstairs and then we can get a little more and also keep our privacy.
Thinking about the 20k fees to move, plus the £25 to move here - it seemed crazy to sell
I knew there was a way to make it work.