Is it possible to relocate my water heater?
Regulations, Regulations, Regulations. However, your existing boiler should have been installed under some previous regulations so changing over to a combi and getting rid of the tank stuff shouldn't be a problem for a qualified gas safe engineer. One of the safety aspects is "Ventilation", but you already have a boiler in place so spend a bit of money on getting legal/professional advice and then invite 3 companies to quote you. Good luck