Kitchen Dilemma: £20k Reconfiguration vs. £60k Extension? (Impartial opinions wanted)

Hi all,

Looking for some impartial opinions on a big house decision. Firstly, I want to say we know we are in a fortunate position but that we’ve saved really hard over the last 5 years to get here. I am very cautious with money, and while this decision might look clear-cut to some, making a choice on this scale is very nerve-wracking for us.

We’ve just moved into a property in an ideal location for our growing family. We see ourselves here for a long time and we are very happy. While the house is mostly fine, it needs some improvements to get it how we’d like it (new bathroom, flooring etc).

The kitchen, however, needs a major revamp. It is rectangular (6.22m x 2.88m), but there are 5 doors coming off the room around the perimeter. This leaves no consistent workspace currently with the kitchen spread around the room, and the fridge is currently in the garage.

Here are the two options we are weighing up (photos attached in the thread):

Option 1: Reconfigure Existing Space. We'd brick up the internal garage door (garage remains accessible from the front/back of the house). Switch the patio doors and window around. Use the new U-shape layout to move the kitchen there. I would absolutely love a peninsula/breakfast bar not necessarily for sitting, but to face the dining area while cooking. It would be tight, but it could work. Estimated to cost around £20k by a family friend (including the kitchen).

Option 2: Extend outwards by 2m, making the room 4.88m x 6.22m. We have already had drawings done. This would allow for a lovely kitchen, a larder, a comfortable dining table, and a sofa area. I love the idea of an open-plan kitchen/dining/family space. However, we already have a separate front room and a playroom downstairs, so we aren't short on living space. Quoted £47k for the build. With the kitchen and finishes, it will come to around £60k.

To be transparent with our finances. We have 45k in savings and 40k in stocks and shares. We earn a combined sum of 5.5k per month and after all essential bills and expenses are paid we are left with 2k each month. We would want to leave 20k in our emergency fund and 20k in stocks and shares. We would therefore take out a loan which we would absolve into our mortgage at the earliest opportunity.

Option 1 works and costs significantly less, leaving cash for the rest of the house. Option 2 is our dream layout, but I don't know if I'm being greedy or if the extra £40k spend is worth it.

We've discussed this with family and friends but we're wondering what an objective crowd thinks. What would you go for?

Thanks in advance!