Thanks all for further comments.
Pendeen - we would be adding a new room - as well as making the kitchen larger - and would also add another w/c. I am also not expecting a return in the short term - but over the time we would stay, I'm guessing the improvements might 'assist' the general (we hope - at some point!) rise in the market.
ecuse - no, the lean to is original - it is how the kitchen part was designed. Sorry I can't advise you there..
Piglet - yes good point and I'd already planned to get full-height foundations laid in case we wanted to add another storey at some point. We are planning to tell the builder what we want, bit dangerous leaving them to 'guess'!
Gentleness - yes I think all niggles would be resolved. I have decided I just love the house. OK the area is not perfect - but then is anywhere absolutely perfect I wonder - unless we are talking £2million?
This house has such a nice feel to it. Even when we've been away and stayed with friends in much larger houses, I still feel happy coming back. When we look around other houses (new and not so new) and get home we just walk in - look at each other and say 'we are mad - this is miles better!'
It's just that sometimes the allure of the new and the modern and the 'no work involved' seems tempting. But I think on balance I would rather stay. We could of course move to another larger older house - but when I think ours could be good for £20 it doesn't seem worth the hassle.