You are doing absolutely the right thing, and it would be illegal for your daughter and husband to use your loft room as a bedroom, never mind accommodating the pets.
Nearby neighbours are struggling with the return of their 35 year old daughter, plus large dog and a horse, (which is housed at very expensive livery stables nearby) and a horsebox, following a relationship breakup. The daughter works two and a half days a week, to pay the horse's living expenses, (nothing for the parents) and the rest of the week is devoted to schooling the horse. This family now have five cars, plus horsebox, as the adult son also lives at home, and daughter's car is almost permanently parked outside my house.
I don't know how these parents, a very pleasant couple, can be so foolish, particularly when I hear the daughter yelling at her father because he hasn't cleaned the horsebox to her exacting standards.
Don't accept any guilt for your daughter's mistakes.