The idea of this design is to optimize the use of your outdoor living area that already exists, and merging it into the interior area, so the whole house will be seen as one entity, having more connection to outdoor (it has an immense and more integrated outdoor area now), without compromising privacy of the night zone / sleeping area (You will notice that now the rooms are more private, with view to gardens and more lights, but still has access to the common living dining area).
The additional third bedroom was added at the corner of both existing separated buildings, adjacent to existing night zone / sleeping area, creating a united L-shaped house. It has an entrance from rear garden, with ensuite bath, also a door to the living room. Wet areas such kitchen and bathrooms remain at their original location to minimize piping works and costs. Almost all existing walls and roof are preserved, only small modification and renewal of wall and flooring finishes applied (example, new painting, new floor tiles if desired, new bright coating for the wooden ceiling to renew the looks). Some new walls are added instead to configure the spaces (example, at the large bathroom, the size is reduced by adding a new wall to provide a connection from inside to the independent child bedroom). There is a new wall with sliding glass doors places in front of the dining portico, the idea is that it will be the area that connects building A and B, but you can occasionally open it to the outdoor living area. The bedrooms and living rooms will have new bigger windows/ glass doors. The exterior wall that encloses kitchen area is demolished to create an open kitchen and better connection with dining room, with a possibility to add a kitchen/breakfast island in front of it (between the old kitchen and the new dining area at the portico).
Furniture are for inspiration only, but the main idea is to have a modern and clean look, with natural white,bright wood,stone/concrete cement,dark grey or black frames kind of scheme. You can apply more colorful accent for the house decorations (example, wall paintings, curtains, fabrics, sofa pillows, carpet, etc).
Hope this design will spark ideas for your house project. All the best! :)