You’ll need to establish that planning permission will be forthcoming for another floor and you should seek an informal opinion on this from your council’s planners. Also, some council’s aren’t keen on demolition unless the building is in poor condition, so check on this. There’s also a technical issue surrounding whether the bungalow’s foundations are adequate to take the additional weight of a new floor and/or larger roof. I am aware from cases I’ve seen over the years that a new build is often cheaper and quicker than drastic extension, but I’d nonetheless get both options costed either by a reputable builder, or by a chartered building surveyor.