House trouble?!?

Hi there just looking for bit of help house wise and about space saving ect. So in our house there's me and out 2 boys 5 years and baby of 6 month and my partner (their dad) we have a 2 bed terrace big bathroom 2 very large bedrooms and kitchen and sitting room downstairs. Im struggling ATM with my eldest can't go on his bedroom because there's a damp problem and floor needs replacing ect and he's loving the fact his bed is in our room with his baby brother I think its brought us closer and hes literally right over other side his toys under his bed (midsleeper) his pics his clock ect

so now I'm wondering when the top bedroom is fixed up and ready do I keep him in our room with us and make his bedroom into a massive play room for him and his baby brother another thing that puts me off him sleeping in that room is the stairs down are so steep like vertical and he gets up for wee ect in my room he's fine because bathroom next door there's no stairs?!?! We do not get changed ect in front of him in bedroom anything like that then I thought of moving but I can't afford it ATM and I love where we are so close to family town school e ct and how can save room in my sitting room so they have more room to play and for more people to visit ect I've already thought of TV on the wall to get rid of my stand please help me with ideas and NICE opions lol. Sorry for the long post. From one confused mummy xx