Thank you for all of the replies. Some good ideas there for me to think about to chat over with DH.
Trying to answer some of the questions/comments.
We can't have the front door on the side as it's a terrace so neighbours either side. Set of 3 bungalows and I'm in the middle.
My neighbours have never done any internal remodelling or extensions as they're both single older people who have lived there since this estate was newly built (1999).
My garden is south facing so I would love the living area at the back as my lounge can be a bit dark being north facing. But I think adding a bedroom into the front would be really small?
We didn't add the patio doors to the back bedroom they were there when we moved in as previous owner used it as a dining/sitting room.
I don't know how feasible it is to move the kitchen to the front of the house due to the drainage? This is something we've discussed but not sure if it would just be a huge expensive that wouldn't really ever be recouped when we come to sell one day. Compared to spending that money on say an extension.
The ideal would be a loft conversion with 2 beds and a bath upstairs. I'd then knock the kitchen and back bedroom together to make a kitchen/diner, keep the lounge as it is with the stairs in there somewhere and keep the front bedroom as a 3rd bedroom/study for my husband WFH.
The fact my lounge is a corridor does make it awkward for furniture placement!
An extension or loft conversion wouldn't be possible without us remortgaging I think. We have about 15k in savings but would need a lot more for those kind of buildings works. My husband worries about borrowing money in the uncertainty of interest rates etc.
I also don't want to move as I love the street I live in, my neighbours are lovely, I love my garden, it's great for school, work, shops etc. Also moving is too expensive as house prices where I live are through the roof (south east England).
I like my house - I just want to make it work better for us.