As Kingston said the plan was to build two new sound stages on that space they've cleared of similar size to the adjacent studios previously used for Big Brother and Dancing on Ice, one of which (the old Big Brother studio I think) is now used for Strictly Come Dancing (our DWTS) and other BBC shows under a long term lease during the renovation of BBC TV Centre. It has gone quiet on the building front - there is said to be a huge demand for studio space in London but others have got in first in creating space further afield. If they did go ahead how it would affect the show remains unclear, but think it's contracted to remain for the duration of the current contract. What the show really needs is for Elstree to build the new sound stages then be unable to fill them, giving the show the opportunity to use one of them as the house.
I do think the C5 set needs updating - my biggest problem with it is the crowd being outside of the house and to be honest considering they've had a few problems which have resulted in them having to evacuate the set, but mainly due to keeping the crowd away from the HMs, I'd be happy now for them to ditch the outside crowd and just revamp the BOTS set to be used for evictions as a fake "front of the house", similar to BB Canada.