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If you're getting a builder in to do major stuff you might as well go nuts and whack on as many extra rooms as you're legally allowed without going completely overboard. You might want to think about getting a draftie off here to draw up some compliant plans for any extensions and take that...

You're missing an extremely important detail - is the house on stumps, a slab, or on those cute little dwarf walls? If its not on stumps you're in for a world of pain underpinning the house. Edit: ugh, brick ATTACHED house? That sounds expeeeeeeeeeeeeeeeeensive to fix O_o