Oh my word! You think you've heard it all and then something new comes along....
Yes, of course, it's perfectly reasonable to expect PILs to give you the house they've probably spent their entire working lives paying for and move in to a rented flat or bungalow - completely giving up the security of having a home for life.
I wonder if PILs have any other DCs? Maybe they thought it unfair to give what would be most people's major asset by far to one child alone and their grabby selfish mare of a DIL.
If a couple can afford to rent a two bed flat in London, I struggle to believe that they can't afford something a bit larger in the Midlands, even with commuting costs. OK, so the Midlands is a large area and we don't know which bit she means but even so, it's nowhere near as expensive as London. As a Midlands dweller, I'm always
at the price people pay for small flats in London.