Depending on you budget, I'd replace the counter tops and flooring. I agree with removing the dark valances. Replace the top corner cabinets with 42" cabinets or remove entirely. The ones there are too small for the space. An island, not that you need the counter space would cozy up the area. Also replace the front on the dishwasher with stainless steel to match other appliances. Your layout is good, no changes there! If you decide on an island, you could include stools there and remove the current peninsula, this would open the area to what ever room is adjoining the space. Good luck and have fun. It is a really nice space.

congrats! first, sand prime and paint out those cabinets....i'd go with a grayish shade of white or pale gray that will work with the flooring. i'd also carefuly chip off the yellow tiles. since on a budget, consider applying some beadboard as your backsplash, painted in a glossy, oil based or marine paint in a crisp white to keep it scrubbable, then, dress up the edges with some small mouldings, painted in the same white paint. this is going to be SO MUCH less costly than tile! and it will look great with the butcher block countertop. you can probably refresh the butcher block with a light sand and oiling. you could even get an additional piece of butcher block (ikea) and create a step-up 'bar' for some stools on the peninsula for some casual seating. then get a pair of pendant lights to hang from the pot lights above (they make lights that insert directly into the pot light...no hardwire necessary).

Having been brought up in a Lockwood home I can appreciate your love of the wood. I notice you have a light green bench and that would blend nicely with some similar colours in the room. I would consider having your cupboard doors replaced or sprayed to compliment the bench or visa versa you can have your bench updated with a new finish to modernise it. Perhaps you could just price out the cost of a new bench and leave the rest of the kitchen as it is. The odd bit around the dishwasher looks weird and that might be able to be fixed by curving a new bench into a small breakfast bar type set up. If there is room I would also reposition the microwave to the right of the cook top and use the existing space for a display or a lovely pot plant.

thank you for your comment. we are looking at using the interior wall, opposite the sink, for ceiling height cupboards utilising the wall cavities so as not to crowd the thoroughfare. I will keep a look out for replacement wooden windows. i would like to move them to the left so as to create more space in the corner area for hopefully a fridge? what to do with the fridge?