If you are worried about causing family issues/upsetting her/don't really want to say no, can you combine the above and go with Hecate's suggestion?
Something like this perhaps?
'Dear Cousin,
How wonderful that you are coming to the UK in August and it will be lovely to see you and spend some time with you.
Unfortunately, now that we have a new baby we won't have the extra space to put you up with us.
I'm attaching a list of B&B's and Hotels in the area that you may want to look at? Now that the girls are older they will be in and out with friends, and tend to be up later in the evening as well. In addition, little baby Lowfat is teething and still waking frequently through the night, so you can imagine that it's pretty noisy during the night!
I think it will be much nicer for you to have a nice, cosy (and quiet!) bolthole round the corner from us that you can escape to whenever you want to.
Obviously we can still meet up throughout the week, but it might be better for you not to have to work to our rather chaotic schedule and have to fit your plans/meals etc around the baby and the girls.
Let me know if there is anything else I can do to help you find a nice hotel to stay in, and of course, dates etc.
Looking forward to meeting up with you soon! etc etc...'
That way, you are helpful and pleased that she is coming, while making it crystal clear that she will be staying elsewhere.