I think it depends whether you are happy in your current home, and whether you are in a financial position to move. If you moved to gain the extra space, could you afford to buy the size of property you need? If not, it might be a better option to extend in your current property. If you did extend i'm assuming you would remain where you are for a few more years, in which case it's likely you would add value to your property and regain the money you have invested.
Have other people in your road had loft conversions do you know? Checking roofs for skylights is a good way to spot those which have been converted.
Thanks for the feedback - looks so obvious when I see it written down but it has made me think. I have not noticed any loft conversions but I will check this. I cant really afford to take on a larger property at the moment and I do plan to stay put for a while yet. It might be worthwhile looking at an extension in the back garden? Is this a sensible option to consider as well?
Certain rear extensions are permitted development (single story and under a certain size etc) so that should make the process easier, quicker and more affordable... get some planning advice from a good local planning consultant as this will help you weigh up the two options in terms of what space you'll be able to add... after that an architect can draw up some some plans and these can then be used to get some figures from a builder to assist the costs. You'll then be well set to make some firmer decisions...
To keep things simple it makes sense to check what is happening in your area to see whether you would likely gain planning permission for a particular improvement. If a number of loft conversions have already been approved by the Council then there is little reason why they would not approve your application.