House 1 looks like it could be really homely if you don't mind doing the work. Also, if you don't mind doing the work as and when you can choose your own kitchen/bathroom and put your own stamp on it.
House 2 is stylish but hasn't been done to my taste, so I wouldn't be willing to pay the extra. Like the lounge though.
Don't know either area. House 2 doesn't look to be in a busy setting, but are you the sort of people who'd notice traffic passing the front and side of property?
Have you seen both houses? If so, putting aside what we all say, which one do you see yourself living in in say five years time.