OP, I wouldn't say that you want your space back in order to store Christmas gifts, as they'll think you don't need that much space for that, and will likely make excuses. I think your best bet is to tell them that you've spoken to someone recently who was in a similar position to them, and they were telling you that they ended up having to throw away all the stuff that they'd stored in someone's garage because it had all gone mouldy. Then say, 'with that in mind, I think it's best if we stop storing your stuff, as it would be a shame for it all to be ruined because it's not been stored properly, so can I suggest you come over and go through it all a.s.a.p., get rid of anything that's already spoiled, or that you no longer want, which I'm guessing is probably most of it, as you clearly haven't needed it in the last 12 months, and then arrange to move the rest of it into proper storage?' If you feel like it beforehand, do a bit of research to find out about some suitable storage places, and what they charge, and then you can tell them about that too. However, be prepared for them to say something along the lines of, 'we really can't do it right now, as you know we're staying in a hotel, which is costing a fortune', or they come up with any other excuse, then just say, 'well you could have moved into the house you were offered, and then you wouldn't be in this situation, but you decided to turn that down, and while we were happy to help when we thought you'd be housed fairly quickly, I'm afraid we now need our space back. We're happy to give you another 2 weeks to come and sort it, and get it moved, but after that I'm afraid we're going to have to get rid of it, as we need our space back.'
If you feel awkward about doing that, you could say that you're considering moving yourselves, so you now need them to move their stuff, so that your house looks big and spacious for when you put it on the market / return it to the landlord.
Sadly, I think they're probably now so caught up in their own situation, that it probably hasn't even registered how long they've been clogging up your house with their stuff, but however good friends they may be, please don't be daft enough to take pity on them, after they've been so blindingly stupid about turning down a proper roof over their heads.