We have not quite so large a family in a 2 bed flat. We have 3DDs (12,10,5)who all share a large bedroom. They each have their own area with drawers etc - my eldest has a wardrobe and a plywood wall to give her some privacy, but they do quite like being in with each other. It gives the oldest 2 a chance to play at daft pretend games with the 5 year old, and play with her toys. There is an area of the room for toys and books.
We have the other huge bedroom, with a real fire and computer and 4m long sofa as well as our king size bed and numerous sets of drawers etc.
It's all quite sociable and nice for me as the kids can't just go and disappear into their room for hours on end.
We have a largish kitchen and a small hall/living room that has 5 doors off it, but has a small sofa and two chairs. We hardly use that room since we got rid of the telly (we now watch telly on the computer - DD has a laptop and we have a large screen and computer in our bedroom.
We do have a garage for the accumulation of crap, and a decent size garden for the guinea pigs. We have 2 budgies and a rabbit in the enclosed porch.
The house is large enough most of the time but does feel a bit cosy by the end of winter. But in spring, summer and autumn we just spread outside and there is loads of room.
ONe day the DD's may get fed up and the DH already says sometimes that we should move, but I am quite happy here for now.
Moving to somewhere small is excellent for reducing the amount of tat we own. We just don't have the storage space so I regularly cull the house for stuff to take to the jumble sale. We equally bring back lots of weird things from the jumble sale, but it is like a carousel and soon disappears back to the next one.
I like my life.
I was brought up in a bedroom with my sister who is 6 years younger and it was never an issue for us.