Your home counts as a least 3 rooms, as your living room is counted as well. If your kitchen is large, that can also count.
A 3 roomed house can accommodate 5 people, so you are not overcrowded.
Children under the age of 10 count as half. Your children getting older is considered 'natural growth' and cannot count as overcrowding. http://england.shelter.org.uk/get_advice/repai rs_and_bad_conditions/overcrowding