@Curiosity101
I think why the layout seems confusing is because the Annexe isn't obvious and it's obviously been adapted to accommodate a family member, not originally designed that way.
I think you'd really need to be in it to decide what to do with it & personally I'd want to spend a year there first & see how the light is and what's good/annoying.
given your kids are so little it doesn't matter right now about it being an ensuite or a family bathroom, does it.
im not Sue NOW about making huge kitchen/family rooms. The cost of heating them is going to be a killer, especially North facing.
id definitely be looking at reconfiguring the kitchen area though as there's enough room to change that 'galley' look!
let the kids enjoy riding 'ride ons' around the house this winter! And being able to do painting inside etc, really makes the most of it being in need of renovation, but not being a cold draughty building site!
that's what I'd do anyway.
that's a lot if house & garden for the price. Here you'd get a 3bed terrace with a small garden & in need of redecoration, at least, if not bathrooms & kitchen.
Shame my job is here, not there 🤣