Well first this is not a house in the pic....so working on the (amount) that the picture is showing, that is spare......... I would Cut it into 2 spaces.
One third a spare bedroom, can never have enough.
The rest would be a very large lounge room.
Even if it had to be a 2nd on, and it would have huge windows, and look onto the outside, where I would have made a amazzzzing garden.