No! Just say no.
The 16 year old can have the baby in with her. Tiny babies actually cost very little unless you insist on everything new. It will be months before space becomes an issue (and it may well stay fine anyway). They are lucky to have 5 bedrooms. Most people don't have space for a nursery at all.
I think your daughter is in shock and will feel better soon.
SNP and Greens end coalition deal
Scottish political mess. Is Devolution working?