Bottom line: great flat in wonderful location; perfect for families and incredibly well-price especially for London; a couple of details could be easily and inexpensively upgraded that could really enhance the experience. Would definitely recommend and would go back.
More detailed: Spent a week with my wife and 3 children (13, 11 & 5). Quaint flat in a great location. 10 min walk to Sloane Sq providing easy access to everything London has to offer. Quiet and comfortable, 1 block from the King's Road, which is full of shops. markets and restaurants - gave us the feeling of living there while still hitting all the sights. Flat is as described, with good sleeping arrangements. Bottom floor was surprisingly bright despite being below street level. 'Office' bedroom great for my teenager with easy access to the outside sitting area. Second bedroom was good for my smaller children - might be tight if you wanted to put older kids / adults together there.
A few little things that could easily be improved: downstairs area could use a fresh coat of paint as it felt a bit dated. Kitchen could be better equipped. There were no large bowls / platters for a family type meal, nor a French press or other coffee apparatus, just a Nespresso machine that uses large pods, which we couldn't find anywhere. Would be good to switch to the smaller pods which we found up the road at M&S. There was only flatware service for 5 so we ended up either doing the dishes often or running the dishwasher only 1/3 full. Finally, we were given the smallest amount of shower gel, shampoo and toilet paper that I've ever seen - we ended up buying our own shower gel after two days and rationing TP on the last day or two.