You need a retaining wall. But first I think you should consult with a landscape architect or designer to get a plan going for what your landscape should look like. Then you can execute the plan yourselves or hire it done. Carolyn Albert-Kincl, ASID

This is a really awkward space! What about trying to build a unit into the corner which seems to be dead space. This could house the television and other bits like dvr,amp etc. The unit could then extend out towards the door in length and in height either up to the start of the window or up to the start of the blinds. I would suggest drawers for toy storage and books above. In this way you leave the windows clear for light plus it looks like you have a pull down screen so the tv would be out of the way of that. This arrangement would also hide all those wires and cables! Ikea have some good examples of storage which you could adapt or copy, such as Besta which illustrates the extended toy storage. http://www.ikea.com/gb/en/catalog/products/S39927155/

Thanks :) Yeah decided to go with tile. So sand cement is ok over existing tiles if I prep them first? Only problem is, the new pad can only be about 30mm at it's thickest (leaving up to 15mm for tiles) otherwise it'll end up being higher than the hallway floor. So I either need to make the fall shallower or not bother with the waste and make it all level. If I made it level, could I use levelling compound at that thickness or would deck mud/sand cement be the best option? Also, should I be putting in mesh for strength? (I know I should (and will) ask the local hardware what they suggest, but it's great to have suggestions from the Houzz community also)

You could lay a nice curved shape garden by the corner of fence and plant layers starting with 2-3 mtr trees at back down to 50-70 cm high plants at front. This will soften the fence line and give you something to look at while on the slab. Something for the kids also like a small structure to play in, on and around would complete a nice family back yard. If you are handy you can make you own small play ground copying parts of a local ground or there are kit sets available. Good luck,