Well, for lack of a better idea, since you find it a drafty little space. I'm assuming the draft comes in on the right? Most of the necessities in the area are located of the left side; i.e. vent, thermostat, light switch etc. What I would do I think is caulk up the drafty spots, maybe even add sized poster board wrapped in batting I covered in a gorgeous fuscia with diagonal grosgrain ribbons every which way covered with a heavy velvet to be attached to the area above & below the window. (Of course remove the drapes that are hanging in there). This for the purpose of using it as a pin-it board for notes. Attach a table height board covered in felt to carry across the full width of the little room. Leaving just enough space for a comfortable little antique desk chair. Paint the back wall a bright cobalt blue, paint the ceiling a silvery pearlescent white. Find a way to attach a clip-on task lamp. And stretch a heavy duty enough wire across the top of the opening and complete it with a heavy doubled velvet drape with a drooping valance. Place a swag with fringe & jewels on it to be closed when not in use. Voila intrigue is yours!

Thanks for the replies! My wife suggested we talk to a local real estate agent, so i think that is a good idea... just that Im not sure how helpful they are likely to be if we arent selling yet :) As for saving for our dream house, I dont disagree, however if doing this up nicely over the next ~5 years or so while we live here nets us some extra in the eventual sale, then that of course will help us as well. Interesting thing happened today actually. I got a knock on the door and one of the older neighbours asked if he could take some lemons from the tree. I of course said yes. Anyway he was telling me he had lived in the street for 40 years. I asked him if the house had always looked like this, and he said no that ~30 years ago the old old owner did a massive renovation and pulled off the timber and put up the bricks and gutted the inside of the house. Interesting stuff!

There are some great comment here, but my take on this would be if you are going custom to take your time and look around. Many designers offer different takes on each person's preference. The colours you have are good but I'd personally would opt for a more warmer cream, with a self print pattern. I would also suggest pinch pleated curtains and not pencil pleat as you have currently, pinch pleated curtains will give you uniformed pleats from top to bottom. In addition to this I would suggest you use blackout linen to prevent light to enter the room, and possibly interlining so that you retain some thermal properties in your fixtures. Having custom made curtains are a lifetime choice for most customers, take your time and don't settle for the first company you come across. The space above your bed i would possibly add a sheer fabric roman blind which is slightly see through but enough to give you privacy if you bedroom is situated on the ground floor. You can also get the a roman blind to match your new curtains if you'd like a more repetitive theme in your bedroom. I would suggest if you do opt for a roman blind, and you are looking for a good qualities add blackout linen. If you would like a rough estimation on what you would be looking at we can assist you so you are aware of what most reputable curtain making specialist charge in this current market.

The all black kitchen looks scary as. Maybe because there's no lightness in there at all.