I'm not sure what you are saying with "Permitted development rights enable generous extensions, contrary to the NPPF". Your figure of 25% is a relative figure which is a very RESTRICTIVE interpretation of the NPPF's rather liberal view. The old policy allowed 35m2, and many other councils allow much larger extensions than you. You further restrict good design by implying "no more than a 25% increase in internal floorspace". A more flexible statement would be "increase in external area". This way, clever design that allows a greater increase in internal floorspace without increasing the scale or mass of the building. For example (semi-)basements and split level / chalet designs.

Perhaps, consider a different figure for bungalows to houses. Using the current term of "internal floorspace", leave as 25% for a house and increase to 50% for a bungalow.

Define "material" as in "the proposal does not involve a material increase in the overall height of the dwelling".

When a proposal includes an increase in height but does not stand out, it should be considered. For instance, the houses in my lane are of different shapes, sizes and orientations. The land undulates. Increasing my ridge height by 400mm would make the loft usable as habitable space, but would not noticeably increase the scale or mass.

More emphasis should be given to the curtilage. For instance a 100m2 property sitting on a 1/2 acre site could have a larger extension than a 200m2 property.